article -- "washington journal" is live on c-span every day at 7:00 a.m. eastern. >> in a few moments, federal reserve chairman ben bernanke on the economic outlook and the so- called fiscal clef. after that, more about the election with president obama's campaign master. later -- the evolution of facebook. >> the average new facebook user is in india or indonesia or brazil right now. they're using a mobile phone primarily to access facebook because they have not had access to a broad band connection. in a lot of cases there is not an infrastructure media of communications you have in the u.s. and lot of americans will leave

me and say facebook is great for gossiping and to see what my friends are in for lunch, but if you were to talk to somebody in the middle east, maybe, you would hear a different story -- facebook was providing access to news, people that had unique access to information that they were not able to get out otherwise. you get a much more meaty story about what facebook means to them. >> facebook engineer chris cox with an insider's view of the company -- thanksgiving day on c-span. at 2:00 -- 2:00, chief justice john roberts. later, space pioneers and nash at -- nasa officials pay amash to the first man to walk on the moon, neil armstrong. >> federer reserve chairman ben bernanke is in washington to negotiate a deal to avoid the so-called fiscal clef.

well speaking at the economic club of new york, he also called for an increase in the federal debt limit, st. a default could result in an economic crisis. -- saying a default could result in an economic crisis. >> thank you very much. good afternoon. it is nice to join me for lunch at this intimate gathering. [laughter] i know many of you and your friends and neighbors are recovering from the defense of hurricane sandy -- i want to let you know our thoughts are with everyone who has suffered during the storm and its aftermath. it has been a very challenging time for new york city. i think you have shown quite a bit of fortitude in coming back and getting back to business. my remarks today are going to focus on the reasons for the disappointingly slow pace of economic recovery in the united states, and the policy actions that have been taken by the federal open market committee to support the economy.

in addition, i will discuss important economic challenges our country faces as we close out 2012 and move into 2013, in particular the challenge of putting federal government finances on a sustainable path and the longer run while avoiding actions that would endanger the economic recovery in the near term. the economy is continuing to recover from the financial crisis and recession, but the pace of the recovery has been slower than fomc participants and others had hoped or anticipated when i spoke here last, three years ago. indeed, since the recession trough in 2009, growth in real gdp has averaged only a little more than 2% per year. similarly, the job market has improved over the past three years, but at a slow pace. the unemployment rate, which peaked at 10% in the fall of 2009, has since come down 2%, to just below a%.

-- 8%. this is a welcome decline, but it -- it has taken a long time to achieve the progress, and the unemployment level is still well above its level prior to the onset of the recession and the level that our colleagues and i think can be sustained once a full recovery is achieved. many features of the job market, including the historic high level of long-term unemployment, the large number of people working part-time because they have not been able to find full- time jobs, and the decline in labor force participation reinforce the conclusion that we have some way to go before the labor market can be deemed healthy again. meanwhile, inflation has generally remained subdued. as is often the case, inflation has been pushed up and down in recent years by fluctuations in the price of crude oil and other globally traded commodities, including the increase in farm prices brought on by the summer drought. with longer-term inflation

expectations remain stable, the ad and flow of commodity prices have led to only transfer movements in inflation. indeed, since the recovery began about three years ago, consumer price inflation as measured by the personal consumption expenditures index has averaged almost exactly 2%, which is the fomc longer run objective. because ongoing slack in labor should continue to restrain wage and price increases, and the expectations of inflation continuing to remain well anger, inflation over the next few years is likely to remain close to or a little below the committee's the objective. as background for our monetary policy decision making, we add the reserve have spent a good deal of effort attempting to understand why the recovery has not been stronger. studies of previous financial crises proved one good place to start. this literature, as many of you

know, has found severe financial crises, particularly those associated with housing booms and busts, have often been associated with many years of subsequent weak performance. while this result allows for many interpretations, one possibility is the financial crisis or the deep recessions that typically accompany them may reduce an economy's potential growth rate at least for a time. the accumulating evidence does appear consistent with the financial crisis and associated recession having reduced the potential growth rate of our economy somewhat at least during the past few years. in particular, slower growth of central output would expand why the unemployment rate has declined in the case of the relatively modest output gains we have seen during the recovery. output normally has to increase at about a longer-term trend just to create enough jobs to absorb new entrants to the labor market. trend growth is usually needed

to reduce unemployment. the fact that unemployment has declined in recent years despite economic growth at 2% suggests that the growth rate of potential output must have recently been lowered from the roughly 2.5% rate that appeared to be in place before the crisis. there are a number of ways in which the financial crisis could have slowed down the greater growth of the economy's potential. for example, the extraordinarily severe job losses that fog the crisis, especially in housing related industries, may have exacerbated for a time the mismatch between jobs available and the skills and locations of the unemployed. meanwhile, the very high level of long-term unemployment has probably led to some loss of skills and labor force attachment among those workers. these factors may have pushed up to some degree the so-called natural rate of unemployment. the rate of unemployment that can be sustained under normal conditions.

a reduced labor force but is a patient as well. the pace of productivity gains -- labor force participation as well. the pace of productivity gains also have been restrained by the crisis as business investment declined sharply. increases in risk aversion and uncertainty combined with tight credit conditions may have impeded the commercial application of new technologies and slow the pace of business formation. importantly, however, all the the nation's potential output may have grown more slowly than expected in recent years, this slowing the scenes at best a partial explanation of the disappointing pace of the economic recovery. in particular, even though the natural rate of unemployment have increased somewhat, a variety of evidence suggests that any such increase has been modest and a substantial slack remains in the labor market. for example, the slow pace of employment growth has been widespread across industries and

regions across the economy. that pattern suggests a broad base shortfall in demand rather than a substantial increase in mismatch between available jobs and workers. because greater mismatch could imply that the demand for workers would be strong in some regions and industries but not weak across the board. likewise, a mismatch of jobs and workers -- if that were the predominant problem, we would expect to see wage pressures developing in industries related demand is strong. in fact, wage gains have been subdued in both industries -- most industries and parts of the country. the consensus among my colleagues at the fomc is that the unemployment rate is still well above its lumber run sustainable level, perhaps by 2% or 2.5% or so. a critical question, then, is why the significance slack in the job market still remains after three years of recovery.

a likely explanation, which i will discuss further, is that the economy has been faced with a variety of headwinds that have hindered what otherwise might have been a stronger cyclical rebound. if so, we may take some encouragement from the likelihood that there are potentially two sources of gdp growth in the future. first, the fact of the crisis on potential output should fade as the economy continues to heal. second, the head winds continued to dissipate, as i expect, growth should pick up further as many who are currently unemployed or out of the labor force find work. one of the headwinds slowing return of our economy -- what are the headwinds slowing the return of our economy to full employment? some come from the housing sector. previous recoveries have been associated with a vigorous rebound in housing as rising incomes and a decline mortgage interest rates have led to sharp increases in the demand for homes.

but the housing bubble and its aftermath have made this episode quite different. in the first half of the past decade, both housing crisis and construction -- prices and construction rose to unsustainable levels, leading to a subsequent collapse. house prices declined almost one-third nationally from 2006 until early this year. construction of single-family homes fell by two-thirds and the number of disk -- construction jobs decreased by nearly one- third. the associated surge in the legacies on mortgages helped to trigger the financial crisis. -- delinquencies on mortgages hops to trigger the financial crisis. recently, home prices and construction have moved up. these developments are encouraging and it seems likely that residential investment will be a source of economic growth and new jobs over the next couple of years. however, welt historical low mortgage interest rates and a

drop in home prices have made housing exceptionally affordable, a number of factors continue to prevent the sort of powerful housing recovery that is typically has typically occurred in the past. lenders have maintained tight curbs and conditions on mortgage loans, even for potential borrowers with relatively good credit. landers said a number of factors, including ongoing uncertainty on the course of the economy, the housing market, and the regulatory environment. unfortunately, while some tightening of the terms of mortgage credit is certainly an appropriate response to the developments of earlier excesses', the pendulum appears to have swung too far, restraining the recovery in the housing sector. other factors slowing the recovery in housing include the fact that many people remain unable to buy homes despite low mortgage rates. about 20% of existing mortgage

borrowers owe more on their mortgages than their homes are worth, making it more difficult for them to refinance or sell their homes. also, a substantial overhang of a vacant homes, either for sale or in the foreclosure pipeline, continue to hold down prices and reduce the need for construction. while these headwinds have clearly started to abate, the recovery in the housing sector is likely to remain moderate by historical standards. a second set of headwinds stems from the financial conditions facing potential borrowers in credit and capital markets. after the financial system seized up in late 2008 and early to doesn't 9, col economic activity -- 2009, global economic activity contracted and credit markets suffered. although dramatic actions by governments and central banks around the world help these markets to stabilize and begin

recovery, tough credit and a high degree of risk aversion remained. avis -- they have restrained economic growth in the united states and other countries as well. measures of the condition of u.s. financial markets and institutions suggest gradual but significant progress achieved since the crisis. for example, credit spreads on corporate bonds and syndicated loans have narrowed considerably, and equity prices have recovered most of their losses. in addition, indicators of market stress and illiquidity, such as short-term funding markets, have generally returned to levels near the scene before the crisis. one gauge of the overall improvement of financial markets is the national financial conditions index, maintained by the fed reserve bank of chicago. this index shows that financial conditions viewed as a whole are now about as accommodative as they were in the spring of 2007. in spite of this brought

improvement, the harm inflicted by the financial crisis has yet to be fully repaired important segments of the financial sector. one example is the continued weakness of some categories of bank lending. banks' capital positions and overall asset quality have improved substantially over the past several years, and overtime the balance sheet improvements will position banks to extend certainly more credit to back dependent are worse. indeed, some types of credit, such as commercial and industrial loans, have expanded notably in recent quarters. nonetheless, banks are being a conservative in extending loans to many consumers and some businesses, likely even beyond the restrictions on the supply of mortgage credit i talked about earlier. this caution in lending by banks reflect their continues desire to guard against risks posed by economic weakness. a common risk at present any major source of financial headwinds are the couple of

years is the fiscal and financial situation in europe. the situation was not anticipated when the united states recovery began in 2009. elevated levels of stress and european and economies and uncertainty about how problems will be resolved are adding to risks that institutions, businesses, and households must consider when making lending and investment decisions. negative sentiment regarding your appears to have weighed on u.s. equity prices and prevented u.s. credit spreads from narrowing even further. weaker economic conditions in europe and other parts of the world have also weighed on u.s. exports and corporate earnings. policy makers in europe have taken some important steps recently and in doing so have contributed to some welcome easing and financial -- in the financial conditions. in particular, the new out right monetary transactions program of the european central bank under which it can purchase sovereign debt of bhumibol euro area

countries to agree to meet prescribed conditions -- a vulnerable euro area conditions that agree to meet prescribed conditions has -- have helped. european governments are also strengthening their financial firewalls and moving toward a greater fiscal and banking union. greater improvement in financial conditions will depend in part on the extent to which european policymakers follow through on these initiatives carri. a third headwind to the recovery and one which may intensify in the coming quarters is u.s. fiscal policy. although fiscal policy at the federal level is quite a expansionary during the recession and early in the recovery, as the recovery proceeded the support provided for the economy by federal fiscal actions was increasingly offset by the adverse effects of a tight budget conditions for state and local governments. in response to a large and sustained decline in their tax revenues, state and local governments had cut about

600,000 jobs since the third quarter of 2008 while reducing real expenditures for infrastructure projects by about 20%. more recently, the situation has to some extent reversed. the drag on economic growth for state and local fiscal policy has diminished as revenues have improved and pressures have eased for further spending cuts or tax increases. in contrast, programs have led federal fiscal policy to begin restraining gdp growth. indeed, almost any -- under almost any plausible scenario the drag next year from federal fiscal policy on gdp growth will outweigh the positive effect on growth from fiscal expansion at the state and local level. however, the overall effect of the federal fiscal policy on the economy in the near term and the longer run remains quite uncertain and depends on how

policy makers meet two daunting fiscal challenges. one by the start of the new year, and the other by no later than the spring. what are these women challenges? first, -- i do mean the challenges? first, the congress will need to prevent the -- protect the economy from the full brunt of the current fiscal tightening built into law, the so-called fiscal cliff. the realization of all the automatic tax increases and spending cuts that make up the fiscal cliff absent offsetting changes would pose a substantial threat to recovery. indeed, by the reckoning of the congressional budget office, and that of many outside observers, a fiscal shock of that size would send the economy toppling back into recession. second, early in the new year it will be necessary to improve and increase the federal debt limit to -- approved an increase in

the federal dedead -- debt limit. the threat of default in the summer of 2011 fueled economic uncertainty and badly damaged confidence even though an agreement was ultimately reached. a failure to reach a timely agreement this time around could impose even heavier economic and financial costs. as this policy makers face these critical decisions, they should keep two decisions in mind. first, the federal gobudget is on an unsustainable path. the budget deficit, which peaked 2009, is expected to narrow further in the coming years as the economy continues to recover. however, the cbo projects that under a possible such a policy assumptions the deficit could still be greater than 4% of gdp in 2018, assuming the economy

has returned to its potential by then. moreover, under the protection, the deficit and the ratio of federal debt to gdp would subsequently returned to an upward trend. we should all understand that long-term projections of ever increasing deficits will never accept underpass because the willingness of lenders to continue to fund the government can only be sustained by a responsible fiscal plans and actions. a credible framework to set a better fiscal policy, one in which the ratio of federal debt to gdp aventurine stabilizes or declines, is urgently needed -- and eventually stabilize or declined, is urgently needed to maintain stability. even as policy-makers address the urgent issue of longer run out stability, they should not ignore a second key objective, to avoid unnecessarily adding to the head winds that are already

holding back the economic recovery. fortunately, these objectives are compatible and mutually reinforcing. preventing a sudden and severe contraction in fiscal policy early next year will support the transition of the economy back to full employment, and a stronger economy will in turn reduce the deficit and contribute to achieving long- term fiscal sustainability. at the same time, a credible plan to put the scrubber government on a plan that will be sustainable in the long run could help keep longer-term interest rates low and boost confidence, thereby supporting economic growth today. coming together to find fiscal solutions will not be easy, but the stakes are high. uncertainty about how the fiscal clef, the raising of the debt limit, and the longer-term budget situation will be addressed appears already to be affecting private spending and investment decisions. and may be contributing to

increased caution in financial markets with adverse effect on the economy. continuing to push off policy choices will only prolong and intensify these uncertainties. moreover, while the details of whatever agreement is reached to resolve the fiscal clip are important, the economic confidence of market participants and the general public will likely also be influenced by the extent to which our political system proves able to deliver a reasonable solution with a minimum of uncertainty and delay. finding long-term solutions with sufficient political support to be enacted may take time, but meaningful progress to this end can be achieved now if policy makers are willing to think creatively and work together constructively. let me now turn briefly to monetary policy. monetary policy can do little to reverse the effects of the financial crisis may have had on the economy cost-reduction prudential. however, it has been able to

provide a important offset to the head winds that have slowed recovery. as you know, the federal reserve took strong easing measures during the financial crisis and recession. cutting the funds rate, the traditional tool of monetary policy, to nearly zero. we have provided accommodations from unconventional policy tools and putting downward pressure on long-term interest rates -- asset purchases that reduce the supply of longer-term securities outstanding in the market and communication about the future path of policy. most recently, after the september fomc meeting we announced the federal reserve would purchase additional mortgage-backed securities and would continue with the program to extend the maturity of the treasury holdings. these additional asset purchases should put downward pressure on long-term interest rates and make a broader financial conditions more accommodative.

moreover, our purchases, bring down mortgage rates, provide support directly to housing and thereby house mitigate some of the headwinds face in that sector. -- helps mitigate some of the headwinds facing that sector. we announced he would continue purchasing, undertake additional purchases of long-term securities, and apply other polity -- policy tools until we get the outlook for the labor market has improved substantially in the context of price stability. although it is still too early to assess the facts of our most recent policy actions, yields on corporate bonds have fallen significantly on balance since the fomc's announcement. more generally, research suggests our previous asset purchases have eased overall financial conditions and provide meaningful support to the economic recovery in recent years. in addition to announcing new purchases, at our september meeting we extended our guidance for how long we expect that

exceptionally low levels of the federal funds rate will likely be warranted, at least through the middle of 2015. by pushing the expected period of lower rates further into the future we are not saying we expect the economy to remain weak until 2015. rather, we expect, as we indicated in our statement, that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens. in other words, we want to be sure that the recovery is established before we begin to normalize policy. we hope that such assurances will reduce uncertainty and increased confidence among households and businesses, thereby providing additional support for economic jobs -- economic growth and job creation. the u.s. economy continues to be hampered by the lingering effects of the financial crisis on its productive potential and by a number of headwinds that ever duke -- tendered the cyclical adjustment of the

economy. the federal reserve is doing its part by providing accommodative monetary policy to promote a stronger economic recovery in the context of price stability. as i said before, while monetary policy can help to support economic recovery, it is by no means a panacea for our economic ills. uncertainties about the situation in europe and the prospects for federal fiscal policy seemed to be weighing on the spending decisions of households and businesses as well as on financial conditions. such uncertainties will only be increased by a delay. in contrast, cooperation and creativity to deliver fiscal clarity, in particular a plan for resolving the nation's longer-term budgetary issues without harming the recovery, could help make the new year a very good one for the american economy. thank you very much. [applause]

>> thank you very much, chairman of bernanke. german bernanke has agreed to be questioned by two of our members. today's questioners are alan s. blinder, professor of economic affairs at princeton and former vice chairman of the federal reserve, and martin feldstein, a professor of economics at harvard. if you have questions, you can e-mail them to quest ions@econclubny.org, and our president will read them. alan, you have the first question. >> thank you for coming here and speaking to us today. you alluded briefly to the reserve's communications strategy as an important method of monetary policy these days. as we all know, the fomc is struggling summit with this communication, in particular how

to move away from a calendar- based form of guidance such as through made 2015 and toward more economic conditions based guidance. could you explain to us why this is so hard? in particular, why we cannot use suitable words to replace the kind of threshold numbers to find and formulations such as charles evans and others have advocated? >> as you know, communication about our policy has been very important for some time. as a general matter, when the short-term interest rates, our usual short-term policy tool, goes to zero, one of the main tools we have for influencing overall financial conditions as providing guidance as to where we expect the rate to go in the future. that forward guidance has evolved over time. we use qualitative language, even before my chairmanship.

more recently, we have begun to talk about dates. we have been giving assessments of what we expect policy to become less accommodative, when we expect to begin to raise the federal funds rate. a difficulty with states -- beside the fact that it is not very transparent, is that it mixes together two issues. one issue is how long until the fed thinks the economy is going to need life-support? how long as the economy going to be in weak condition? but also, what is the fed's response -- how is the fed going to respond to economic conditions? those two things are conflicted with the date. we recognize that. we have tried to address that a bit in our language that i mentioned in my remarks, going back to september when we said that air date with respect to

the rate beginning to rise is mid-2015, but we also make clear we anticipate raising rates only after the economic recovery has begun to strengthen. clearly, an important reason why we are looking to hold rates low for almost three years is we rent to be particularly suga not to take away accommodation before the hour economy has established an upward momentum, so to speak. different ways to communicate that information -- one would be to provide specific numbers on what economic conditions would make us consider the prospect of removing accommodation. several people on the committee have made suggestions. this is something we are looking at very carefully. it does have the advantage that

it would help to distinguish between our anticipation for the economy and how we would react to those conditions, and would have another advantage which is that as economic conditions vary and news comes in that makes the markets think unemployment will be low or high for longer for example -- that would automatically lead the markets to adjust rates appropriately. there are definite advantages. on the other side, and there are issues in number of my colleagues have raised -- monetary policy is a complex process, as you know. we have an enormous amount of material prepared for us every meeting -- forecast, detailed data analysis, so on. the question is, first of all can we reasonably summarize those conditions under which would begin to tighten policy? just two or three numbers? even if we could, could we get

sufficient agreement on the committee to do that? so this is a very promising direction. we are continuing to look at it, continuing to try to improve our communications generally. but as the committee is still discussing this particular approach i do not want to front- run those discussions that are still ongoing. >> thanks very much. you spoke about housing. can you explain to us that the level of mortgage lending and therefore homebuying is being depressed by the commercial banks overly tight lending standards -- my question is, what can the fed do to improve this and therefore increase mortgage lending beyond reducing interest rates? >> as i indicated in my remarks, the housing sector has been a major player in this drama,

first with the boom and the collapse, and now playing a role in the recovery, as we hope. in terms of expanding mortgage lending, the growth of the housing sector, you said beyond interest rate policy -- you do have to mention, one of the strongest things we can do is maintain low mortgage interest rates. they are at historic lows, as you know. combined with a 30% decline in house prices across the country, it means we have extensive affordability now for people who are interested in buying a new home. the reason i bring this up is that i think there are some positive dynamics that can occur here, particularly to the extent that the housing market appears to be now moving in the right direction. we are beginning to see increases in house prices. that will feed back on mortgage lending decisions -- one of the

reasons they have been keeping mortgage conditions tight is that they have been afraid of further house prices declines, a weak economy, unemployment, the sorts of things that could lead to mortgage defaults in the future. if we can get ourselves into a positive virtuous circle here, with rising house prices, rising construction improving unemployment, that will result in an easing of mortgage lending conditions. as we keep rates low, the profitability of mortgage lending goes up, there is a lot of evidence right now the banks are beginning to expand their capacity and their interest in making more loans. i think the monetary policy part is a very big part -- we have some other ways to address this. i would summarize them as regulatory, supervisory, and analytical. on the regulatory side, very much involved and the writing of the rules for implementing both

dodd-frank and the basel accords. while those rules are about broad financial stability, many aspects of this rules to effect mortgage lending. for example, the capital on mortgages -- the rules for securitization, and so on. our objectives in writing those roles are of course -- the primerprimary purpose of dodd- frank and the basel accords are to ensure financial stability, but we should take into account the housing aspect there. on the supervisory side, we have made an ongoing effort to promote mortgage lending by first encouraging banks to take an appropriate balance between prudence on the one hand and making loans to borrowers -- creditworthy borrowers on the other hand. we do not take the view that tighter is always better.

the balance wheel struck -- we encourage that. we have done a variety of things to try to help on the margin. for example, we have encouraged banks, rather than selling anti homes intolosed the market, to ransom for a period that is appropriate. we are also -- or rent them for a period that is a program. there is also the very large settlement -- the outcome is that banks and working hard to increase their modifications to reduce foreclosures to assist homeowners who were unfairly treated in the past. from a regulatory perspective we are trying to help. in that respect, we are like other regulatory agencies. finally, i do not want to underestimate this part -- the reserve, we have devoted quite a

few good economists to study and housing issues. we have been influential in talking to other agencies, the treasury, the congress, in providing ideas and approaches. for example, as you may know, a year ago we put out a white paper which describe some of the key issues and approaches and provided some analysis for things to be done to improve mortgage lending. we have been very supportive of steps like those taken by the financial -- housing oversight body to take steps like clarify the conditions under which mortgages would be put back to lenders or creating programs to convert and teahouses into rentals. we have a lot of influence -- empty houses into rentals. we have a lot of influence from

that point of view, and will continue to do that. these are very challenging problems, and the barriers to mortgage lending and more active growth in the housing sector are many and diverse. it is not a simple magic bullet -- we are trying to work wherever we can. >> in discussions of on conventional monetary policy, which you were discussing several -- the question of lowering the interest rate on excess reserves often comes up and i am often asked, why does not the federal reserve do it? you could probably -- what would your answer? >> here is the question -- the question is the following. the federal reserve is the

repository, so to speak, of a very large amount of reserves that the banks told with the federal reserve. pondweed currently pay interest on those reserves, the -- we currently pay interest rates on those reserves of 25 basis points, 1/4 of 1%, a very low interest rates we pay. parenthetically, this ability we have to pay interest on reserves is going to be very important in the future. when the time comes to raise interest rates, one of the tools we have to do that will be this interest on excess reserves, which we can raise at the appropriate time. this is in the power of the board of governors to race. , we will cause short-term rates across the spectrum to rise. banks obviously are not going to land into money markets at a price lower than they can get from the fed. this is an important instrument

for us. we'll be using it at some point at the appropriate time to begin to tighten monetary policy. the other direction -- why don't we just pay no interest on excess reserves? and thereby get a little more accommodation? that is something we considered repeatedly -- i do not rule it out for the future. the cost-benefit analysis we have done in looking at it, starting at where we are at 25 basis points and falling, if we were to cut the rates 25 basis points to zero, our estimate is it would effect short-term interest rates, overnight rates, by something like eight or nine basis points, an extremely small amount. that would have an even smaller effect on the interest rates to care about -- the rate cut out the loans or houses -- on auto loans or houses. well going in the right

direction, the i\ fac we -factory considered to be very small. if there is no return on overnight money, a variety of different institutions, money- market, so on, might become more illiquid because there will be very little incentive for participants to transact in those markets when they could just pays your -- why not just cold cash -- pay zero -- why at this will catch? the concern is it would be a less liquid market. those of the kinds of concerns we have. we have seen some interesting experiments. relatively recently, in europe, the deposit interest rate has been cut to zero. it is hard to judge what the fact that really is. the markets in europe are not really working much anyway --

there is a bit of a question about what effect this has. those of the kinds of trade- offs. i think -- think of this is a major toll that is unused. if it were used it would have some effect that would at least be marginally destructive in terms of market functioning -- destructive in terms of market functioning. it would add a few more basis points in terms of accommodation. it is a relatively small cost benefit diocletian. >> then, you mentioned the fiscal cliff. everybody here, a lot of people who are not here, are worried about what would happen if we went over the fiscal cliff. the combination of higher taxes and spending cuts are estimated to take 4% out of a relatively weak gdp. even if we do not and some deal is struck, the combination of

eliminating the payroll tax reduction, which seems to be something the administration supports, that, together with some base broadening, would probably be at least 2% of gdp. if there is going to be a deal, it would involve spending cuts as well. even if we avoid going over the cliff, it looks like there will be substantial fiscal contraction mary impact next year. in that environment, what can the fed do to try to offset that to make sure that it does not take us to the edge of ore over the edge of a recession and there we wil? >> we will see what deal comes out. but you are correct that even if the most extreme scenarios are avoided, some plausible

scenarios still involved relatively contractionary fiscal policies over all. i made that point in my remarks when i said that under most plausible scenarios, no matter what happens, the tightening of federal fiscal policy will outweigh the stronger expansionary state and local fiscal policy we are getting. that is right. it is up to congress and the president to figure out how they want to make the trade-off between getting budgetary improvement in the long run and providing additional support for the economy in the short run. they will have to see how that goes. again, my advice on this is do no harm. in that respect, what i am particularly concerned about is that we avoid the full force of the cliff, which would be quite substantial, as you point out. so if there is some federal

, to some extent by state and local governments, that would be an ongoing headwind. but again, in that situation the economy will still be growing, albion not necessarily at a rapid pace. what the fed reserve can and will do is continue its stated policy, which is to do additional asset purchases, take whatever other actions are appropriate to try to ensure that the outlook for labor markets improves in a sustained way and a substantial way. we will continue to do lambaste to adam -- our best to add to the recovery. the point i made, and i want to reiterate this, is that the ability of the fed to offset

headwinds is not infinite. we have certain tools, we have obviously used are easiest tools, and we can certainly have a meaningful contribution to supporting recovery, but in particular, in the worst case scenario where the economy goes off the broad fiscal clef, the largest fiscal cliff, which according to our own analysis would throw the economy to the recession -- i do not believe the fed has the tools to offset that. that is why i believe it is important for the congress to address these fiscal issues soon and in a bipartisan way, a way that achieves the necessary long-term sustainability concerns the value of talk about recently, but also takes into -- i know you have talked about recently, but also takes into account how much strain will be experiencing in the next six months to a year from fiscal

changes. have a question from the audience. >> you talk about the uncertainty of businesses because of all the things he mentioned. that is impacting decisions on investment. how much growth has been lost because of that, do you anticipate? >> it is neither here nor there, but when i was a graduate student 30 years ago i wrote my dissertation on the question of how uncertainty effects investment spending. i concluded it is not a good thing. [laughter] they gave me a ph.d. for that. [laughter] so it seems pretty clear -- one of the benefits of the way the

federal reserve operates, we have to of reserve banks around the country. at the fomc, we have folks from all around the country with different experiences and different backgrounds who in turn are talking to the local citizens and other business people, bankers, trying to get a sense of the economy. we hear an awful lot around the fomc table of an anecdotal nature. it is certainly true that businesses are very concerned about uncertainty, and that seems to be a drag on their spending and hiring decisions. in fact, it is kind of striking that right now consumers seem to be actually doing a little better. consumer sentiment has risen, consumer spending has been a bit stronger, but businesses, partly because they are more exposed to the global economy, perhaps in

the be more aware of the fiscal issues or more directly connected to fiscal issues, business confidence has been low and investors response to that has been weak. that is an important factor. it is restraining particularly longer-term investments, a leading business is to wait for a resolution of uncertainty before they commit to new hiring, new products, new markets. in that respect is clearly negative. you ask for how much -- i think it is probably significant, but it is very hard to assess any kind of rigorous way how the effects are. i think they're meaningful because, as we see, businesses have been cautious and conservative lately. the other thing that is very important is uncertainty about what -- there's a lot of uncertainty in the world now. uncertainties in europe, in the fiscal policy, uncertainties

about the stability and strength of the recovery. it is a little bit hard to separate all these different factors when you ask business people what they are most worried about. but what we like to do is to attack the issue on all fronts. fiscal policy has a role to play. our european colleagues will take necessary actions to create stability on the continent. as the federal reserve, we will do what we can to support ongoing recovery and growth and jobs and create the demand for output, the demand for product, that will remove that uncertainty about the future and sustainability of recovery. if we work out all these margins, i hope it will help restore the confidence we need for a strong recovery. i really have a sense that there is a lot of unused capability, not just in terms of unemployed workers, but in terms of potential products, new

investments, new technologies, things that are just on the shelf and not being utilized to the full extent. these people are waiting to see how things will of all. i do think it is an important potential for the economy to strengthen significantly if there is a greater level of security and comfort about where we are going as a country. so i hope very much that is what is going to happen. >> thank you. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> a prime-time schedule tomorrow night begins at 8:00 p.m. eastern with an analysis of the election by democratic and republican strategists. at 9:30 p.m. eastern, a former state department official talks about her cover story in july's "atlanta" magazine about the challenges of balancing work lives and personal lives effects social policy.

later, the cbs news chairman and the future of network tv news. he spoke to students at the walter cronkite school of journalism at arizona state university. >> in a few moments, more about the election with president obama's campaign manager. in an hour, a look at education policy and school choice. after that, a discussion on the evolution of facebook. later, a forum on how demint could solve the world's problems. -- gaming could solve the world's problems. >> on washington journal tomorrow morning -- we preview some of the cases coming up in the supreme court with david savage of the los angeles times. then, a guest from the institute of policy studies will take your questions and comments about the

fact of military deployments. then a guest to discuss his "washington monthly" article about the energy bill. live on c-span every day at 7:30 a.m. eastern. >> there are many people who might even take issue with grant at saving the union during the civil war. didn't lincoln do that? he did. i am not going to say grant was the only person who saved the union. but he was the commanding general of the army that put lincoln's policies into effect. he was the general who accepted the surrender of the army of northern virginia under robert e. lee that ended the war. if anybody one of the war on the battlefield, if you could say that any one person did, and of course you cannot, but one of the things we do when history is we generalize, we simplify,

because history and reality are simply too complicated to get our heads around if we deal with it in its full complexity. so gramm save the union during the civil war. i do contend that grant saved the union during reconstruction as well. >> from obscurity in illinois to a courthouse in appomattox and 1600 pennsylvania avenue, the light of ulysses s. grant, thursday night. part of book tv's holiday weekend, starting this thursday on c-span 2. >> more on the presidential campaign with president obama's reelection campaign manager. he was at the politico breakfast for an hour. >> congratulations. >> thank you. >> you have been in montana. >> drinking beer. [laughter] >> what else did you do?

>> on my beloved university play football. i did this amazing thing called sleeping, which i have never done. right after this year -- i am going back. >> going back? >> for thanksgiving. then we leave for italy on saturday. >> this is the first time you have done an on-camera national interview. why? >> it seemed like a very bad idea at the time, but we had an amazing on air people like stephanie cutter -- my salty language did not seem like it was fit for television. during the campaign. we decided to do that after were. >> at what point did this race become unwinnable for mitt romney? >> i am not sure what that moment was. when i thought we were going to win this election was a few days

before the election, when early vote numbers continue to look very good for us. i was pretty sure -- >> how long were you pretty sure? >> after debate 1, forces came in motion that made you confident? >> absolutely. it was competitive the entire way. i think mitt romney could have one up until the very end. i always believed in the fundamental truth, which was we were building the best campaign in modern political history. we had the better candidate and best message. i believe we could win it. >> the story of this election is the degree to which you replicated the 2008 results. many people, republican pollsters, thought that 2008 was a once-in-a-lifetime result.

you came very close to replicating it. the most fascinating statistic of the election is african- americans in ohio -- a 11% of the electorate in 2008, 15% of the electorate this time. you found 200,000 more african- american voters to turn no out,d mitt romney lost by 103,000. it was finding this 200,000 extra african american voters. where did you find them? >> we want at this election because of barack obama. people volunteered for the president in historic members because of his message, because of the campaign he built, and because they're making the philosophical choice about where the country to go. from the first day he offered this job, he said this has to the grassroots. to go back and run a campaign at the grassroots. that is how we got the turnout numbers that a whole bunch of people spent 18 months telling

you we could not get there. we built the biggest grass-roots campaign in modern american political history for that moment. to get more people involved in the process, i do very well in early votes, do very well on election day. the results show that the campaign made people want to volunteer and support the president. >> you were there early on registering voters with the barbershop program -- how important is that in a place like ohio? >> huge. we learned from 2010 a very viable lesson. his supporters would turn out magically -- it does not work like that. you have to run a sustained operation, have an ongoing conversation about why they should support the president, get out and vote, and we did that. it had eight subsections to target directly some of our key

constituencies -- democrats, youth, women, minorities -- we spent a bunch of time messaging specifically to them. talk about the barbershop campaign, which we were excited about. we had the nail salon campaign -- all to me people were the work, to register. we registered 1 20 million people on the doors. 1.1 million people on line. a little under 3 million people total registered. you do not do that if you are not1.1 million people online. you do not do that if you are not where people are. we build a campaign that was about meeting people on the doors. >> tell us about targeted sharing. >> that was a hard and long effort to build software that had a simple concept -- in 2008 we had two campaigns. a door knocking campaign that with sophisticated and an online thing that in many ways we did not control. will.i.am happened outside of us. those things did not come together. we spent a year trying to build pieces of software that allowed

all of our different pieces to talk to each other through this thing called-board. -- dashboard. it said, very simply, we will build software that allows you to organize wherever you are. if you want to organize at 3:00 in the morning, you can do that. if you want to put your data into a database, you can do that. we are going to track every metric in this campaign and it is not going to be in one place. then we said, how do we use this, how we use jim messina to reach out to his world? our research showed that the single most persuasive person in an undecided voter's life was their friends and family. this is very different than the traditional way of getting a lesson or getting an application with a list of addresses and their voting history in knocking on the door. this is talking to people that i know through facebook.

>> yes, what targets sharing was, and it is one of the most important things we did, an application that allowed you to go and the match your world with our list. click here to send them a piece of content, send them a sheet, ask them to support the president. it sounds like an easy concept. it is not. it is hard to do. it took a year of amazing work of our talented technology team. we were able to contact over 5 million people directly through their facebook world. people they knew. they are going to look if there friend send them something. they know that person. >> what was the likelihood i would do it? >> over half of the people we

ask did it. of those people, 50%, they followed all the way in through to make sure their friends did something. >> looking at how you won, you can argue that campaigns will never be run the same way again. in the specific area, how is that going to change how a sophisticated campaign will run? >> what we learned is you can build analytics to use your volunteers' time more wisely. it all comes back to the candidate. having people wanting to volunteer. we had all that stuff because people support a barack obama. in the future, actually, in many ways it is a return to the past. door knocking is going to be more important.

the fusion of american media makes it harder to get your message out. there is so much television, citizens united created this cacophony of television in the final months of the campaign. people got so much of it, a simple door knocker from a neighbor mattered more than anything else to say, let me tell you why i am supporting barack obama. i live down the street. let me talk about an issue you care about. that became incredibly important. >> your volunteers spent less time doing what than 2008? >> knocking on doors of people who end -- or never persuade a bowl. the best example was a friend of mine was door knocking before the election. he called and said that me tell you a story about why you are running a smart campaign. i was told to knock on two doors. one was to chase an absentee ballot. the second one was announced the -- and decided voters.

i had a great conversation. i am pretty sure that person is going to vote for us on election day. that is honoring volunteers and saying to the contact, you will matter to us. i think it allowed us to hit more doors and more effective or is that the romney campaign. >> how did the data play in your wind? >> in the past two weeks, it has been a little bit overplayed. it goes back to the president and his message. we built an army but when you're building that army, you have this thing called beta. data allows you to do one thing -- use your time and money more wisely. we used data for everything. trying to figure out using our time wisely. >> what is an example of that?

>> whether or not people were going to volunteer for the campaign. everyone in this room has done calls to ask people to come out to the phone. remodeled every person who is for about the president about whether they would volunteer. you're forced -- first call -- >> history, what we know about you. we got a lot of data and you're giving history, everything we knew about that allow us to figure out whether you were going to volunteer. we knew whether people were going to be a better direct to mail a giver or online. he did a test -- we did a test with a piece of mail, we did have the old way, direct mail, and half using our data analytics. both sides were convinced they were right. data analytics a report by 14%. that allows us to use our data better. >> there have been stories about sarah jessica parker fund-

raising. seven versions of the e-mail, she mentioned she was a mom or that and an wintour was going to be there. -- anna wintour was going to be there. >> every e-mail had already been tested a variety of ways. our team, are ridiculously talented team. >> what worked and what was a dog? >> willis had tests. they love giving me a little grief and testing against everyone. george clooney completely thrash to me. -- thrashed me. >> tell us what you learn from the george clooney dinner with the president.

>> at his home. >> and it was a lottery to get a spot. how much did you raise from that? >> we ended up doing on that event a little bit over $13 million. between the actual eve and then the online component. >> what was at about the e- mail, what was the perfect storm that every campaign tried to copy? >> with clooney, you can see all the women nodding. there was no analytics there. first of all, dinner with obama was the most successful program we had in 2008 and 2012. it goes back to the canada.

people say to me all the time, can this be replicated? no. the campaign cannot because it revolves around a bunch of people, whether you like the president or not, you have to add that that a lot of americans are motivated by his candidacy and people wanted to sign up and be part of things like dinner with obama because they supported him. >> tell us what works and the mellon what does not. >> that is a hard question to answer. what works is direct connection to people. offering them something -- we learned offering a chance to be with the president, a chance to be part of history, a chance to sit down and break bread and have a discussion with the president. >> what about the format -- >> a huge difference. where you put the button, -- >> what phrases work? >> colom have dinner with barack obama worked pretty well. -- come have dinner with barack

obama worked pretty well. people want to care about your guide. >> what was the most helpful analytic tool you had this time that he did not have in 2008? >> i think targeted sharing was incredibly important to us. i think we modeled better. we build support scores for every voter on whether or not they were going to support the president. >> what would that have included? commercial databases? >> that is overrated. the stuff we knew after five years, whether you slammed the door in our face, how you voted, how many primaries, things most people had allowed us to -- we went to an everyday ensample people to see whether or not our model was right.

and how people were going to vote was within 1%. our modeling predicted our final vote in florida within 0.2%. >> you are confident in your data because of the redundancy you had. tell us about the date you got every night. >> i hope we get into my feelings on american polling, especially the public wants, we decided to go deep. we had an hour and alex team and do several thousand calls -- >> describe that. >> it was a department they used to data across the campaign to make everyone's job better. we had over 60 full-time analytics people. every night they would do thousands of random sample calls. every night i had to look in all of the battleground states and

every night they would run, a 66,000 bottles of the campaign. >> that has been said before. what does that mean? >> we built a model similar to run the campaign over and over and over. it gives us a likelihood of caring that state. that allows our media team to spend money wiser in the battleground state. it means you run that many simulations to get a statistically relevant sample to make sure the data was right. every night they did that. then we had our talented pollster. then we had state posters. each had a different one. we really had three books at the electorate.

that allowed me to, to have a look at how we were doing, where we were moving. which is why i knew most of the public polls were ridiculous. >> so, what do you think about public polls? [laughter] >> look, a bunch of polling is broken in the country. it is not for anyone's malevolence. cellphone usage has changed the industry. people like getting under 10% response rates. gallup has been wrong repeatedly for a very long time. only in one election in the past six has it been right. 10 days out they had us losing the final day. everybody tried to get close. another one announced they were no longer going to pull in florida or virginia because the

president could not win. how can you say that? nobody -- >> which is most accurate? >> can i have another question? >> we have a twitter question. where do you draw the line with data durbin campaigning? are their privacy issues? >> absolutely. we had 18 inside of our campaign that tested our privacy policy. the president believes in this. the new york times reported that if you went to obama for america, you would get a cookie if you went to way porn website. >> that is not true. >> it was on the front page of "the new york times." >> ok. [laughter]

>> what about my surfing would have been relevant to you? >> most of that stuff is not true. the best data was things we collected at the doors. there was some commercial stuff that every campaign purchased. the truth is the more we learn about data, the more we learn how imports and the connection was. the door knocking, having a real conversation, that mattered. >> what happens to the database now? >> we went out and survey the our entire world and said to them, what are you going to do? what happens to us? people want to be involved in supporting the president. how about looks is a discussion we need to have. he cannot run two campaigns and then say we're going to do it from d.c. that is not how it is going to

work. what is going to happen is our people are going to get to make some decisions. we will go through a process where we sit down with them and part of the thing we did in the 2012 campaign was have a series of town halls online to say what kind of campaign to you want to run? that is why we did things i did not want to do like it involved in local elections in wisconsin because our people wanted to. we're going to learn from them. >> what are the mechanics? this was an e-mail from you. asking people -- how many hours per week i might volunteer for the obama organization. what is it now? will there be something in chicago?

>> we do not know. the thing people said to me since the election, and the president talked about this, it will take all of us. whether you voted for him or if you did not to come together and tackle the challenges of this country. people spent five years winning two elections together. they are not going to walk away and become the change they want to see. >> is it possible obama for america will remain in chicago? >> i think anything is possible. what is true, the campaign needs to shut down. we have to figure out what we do next. that is the conversation we are having.

>> there is an organization that could continue to exist. >> it could, in theory. >> you have this amazing infrastructure, why not institutionalize it and make it a permanent organization ready for the candidates? for the next nominee? >> some of it will live on. the tools we build, all of those things, i hope every campaign uses. i hope it becomes important. the important thing to note is, you cannot give this to the next candidate for president. this organization was built for people that supported this and who were involved. we had over 32,000 liters to

volunteer full time. those people were involved because of positions of president of. we learned this to our own surprise, you cannot handed to the next candidate. >> would you sell access to target sharing to any democrat? >> i do not think you sell. we are now calling to get in the business of selling things. there are many ways to do that. what we want to do is have a discussion about it. they are the people who know how to do that. what they want to use them on now is to continue to help the president advocate for his agenda. >> how will that work? >> you could easily see people using it to say, ok, i want to talk about the choices in front of us on the fiscal cliff and organize my friends. it would be easy to start a group in the last couple of months. it would be easy to go and ask people to call members of

congress. that would be easy and i am sure you will see our supporterr america will be an organization that will use these tools, use your database, use your supporters to advocate for the president? >> i think that everybody needs to work together to tackle some of these challenges. of course obama supporters are going to be involved. i will be one of those volunteering. >> what happens to the day that? >> i am going to go to italy. the one thing i know is that i want to be involved in some way

helping this president. that is what i will do. here is the truth. i have taken a 1 week vacation in five years. it is time to restore my energy. the president and i were joking about how bad i looked. it is time to take a vacation. >> what did you say about how he looks? >> i said i thought he looked great. >> as a possible you will go into the white house? >> i have done that. i back to work on health care. i think my future is probably outside the white house helping him becoming part of whatever happens to our social movement to advocate for his agenda. >> it is up -- possible you would run about love for america on the outside. >> what we have to do first is have a discussion about what our people want to do.

>> what is the horizon for making decisions about that? >> you will see us make decisions by the and not grow. that is natural. that is what we did last time. last time everybody thought we were going to do one thing. i do not think on election day we expect it to do that but we had discussions with our people and ended up doing that. it is clear healthcare would not have passed without that decision. >> the amazing thing the obama campaign has done, you were the first presidential be like to get 50% of the vote twice. and you did it in different ways. tell me what steven spielberg told you about that. >> when i left, i did a tour of the country to talk to people. the truth is, the world had

changed since 2008. all of those things have changed drastically. i went to see a lot of people and steven spielberg said to me, you have to blow up the 2008 campaign. you are on the the 1965 rolling stones once and then you charge too much for your ticket. it was an interesting way to think about that campaign. i said to the president i need you to promise me it is not going to be 2008 again. he said, what are you talking about? we've won. i said if we run the same campaign, i think we will get beat. we need a new campaign because of technology. he said to me, ok, but as to be about the grass roots. >> and you have to win. >> so we -- he made the single

most important scission to put us in chicago. i think that was a crucial moment. >> there was debate about this. some people worried if there was a natural split between the west wing and the campaign, why did it work? >> because you had a bunch of committed people who spent all day, every day, sitting in an open space in chicago, almost no offices, and built a brand new campaign. the reason i knew it was going to work was in on august of 20 11, -- 2011, somebody said is there's something happening in d.c. these days? what is happening?

we were focused on building. we did not have you poking and prodding us. we were able to spend a year building a whole bunch of things becoming helpful on the ground. we were able to spend 15 hours a day, every day, building a grass-roots campaign. >> how many people were in the building? >> 650 in july. then we started people -- putting people in the battleground states. >> what was the most you had on payroll? >> a little bit over 4000. in october. >> and, did you -- can you imagine another campaign being that size? or is that what a campaign looks like?

>> i think whoever has my job to blow it up and build their own campaign. everything is going to change again in four years. i think they should do what we did and spend a lot of time trying to dream their own dream. >> what is the smartest thing and the dumbest thing that the romney campaign did? >> the smartest thing, that is a great question. [laughter] i did not mean that snidely. i thought they were amazing fund-raisers. >> what, specifically -- >> more maxed out money, more maxed out checks. >> what did you learn from that? later, they got their checks earlier and you got your as a leader in the cycle. was that planning or necessity? >> we had a better model. our average contribution was $47.

that has most of your money at the rnc or dnc, and that is a problem because you want to spend your money. our fund-raising allow us to do everything inside which allow us to spend our money on the ground. the majority of their money was at the rnc because they were raising $30,000 checks. >> what is a blunder, something that was costly to them? >> the jeep ad. that was the biggest one. they spent the last 14 days of the election on the defense. day after day they had to answer for that. it put them on the defense for a long time because it was not true. >> the flip side of that, you put the events back in spring, defining him.

a lot of regret among republicans about how early you define him. the kind of campaign -- why was that a brilliant insight? >> at the time it was risky because of super pacs. we were going to spend a majority of our money in the summer and not of the fall. we were going to get out spend because we believed that late tv did not matter as much. it turns out we were right. >> based on what you know about the nation's mood and geography, everything you learned, what republican candidate would have had the best shot? >> that is a good question.

we were honest about our concerns about jon huntsman. i think he would have been a tough general election candidate. as someone who helped manage his confirmation, he is a good guy. we looked at his profile and thought he would have been difficult. >> and you thought by bringing him inside, you would take him off the -- >> i thought he was a committed america and who would serve our country well. and he did. >> based on your knowledge of the country's mood, what of the candidates out there has the best chance of doing well in this coming cycled? >> that is their discussion. their party is going to go through a soul-searching. that is a normal thing. my party went through that in

the past. >> what do they need to look for it? >> they cannot continue to hemorrhage youth and latino votes. the future democrat perks of this country are changing -- demographics of this country are changing that is going to make their math difficult if they cannot appeal to these growing segments of the populace. >> we have already had an interesting conversation about reaching hispanic voters. you feel like there is the degree to which they do not get it to? >> we will see. we will see the lessons they learned. whether or not they come together across party lines to deal with the fiscal cliff in a way that makes sense, whether

they pass in immigration bill that makes sense for the country, those would be good signs. >> what was your immediate thinking about paul ryan and where did you end up thinking? >> my immediate was i cannot believe they're going to do this. just -- i -- axelrod always thought it was going to be paul ryan. >> he did not. he thought it was going to be tim pawlenty. >> ax looked at me and said they are going to pick paul ryan. at the time i thought to myself, they're going to spend a lot of time on defense on medicare, medicaid, all whole bunch of issues. >> they were not divisive issues. >> did you see how close florida was? i think they spent some time defending it. we obviously thought it was

important. we air anded several labs -- aired several ads. i thought he added some youth and energy. they had a base concerns and he helped those. so i am not criticizing the pick i just think there were other -- >> you are. >> i was giving an assessment of the good and bad. >> was the helpful? he gave them excitement. he bought them silence from conservatives. did that help or hurt mitt romney?

>> i do not think it did much of be there. here is the truth. we carried his home town. vice-presidential picks usually help you in their state or they add something to the national ticket. you have to ask governor romney. >> besides the automobile in the midwest, at what other regional issues? >> in iowa and colorado, wind energy tax credit. there was an issue that was important in both of those states. obviously models, jobs, the president jobs plan. and i think taxes. we had a fight where you had the president advocating to increase taxes on people who made more than $250,000 a year. >> looking ahead at the agenda, how big is climate energy? >> if you look at what to this country needs to do to create jobs, having a sound energy policy makes incredible sense. i think there are it a lot of voters who cared deeply about this. i think a lot of the youth of voters have said repeatedly this is an issue they want

addressed moving forward. it needs to be addressed and, from an economic standpoint and for the future of the country. >> you think the president will do something dramatic? >> he has a plan to move forward. >> is the new democratic movement dead or no longer relevant? >> i think that our party has always been the big party and we have different views and that is healthy. that is exactly why i believe i

am a democrat. i believe our vision of the country has a lot of people working across party lines and there are folks in our party who all want to do one thing. that is work to move the country forward. we just had an election two weeks ago. i feel great about the outcome. everybody needs to work together to deal with our challenges. >> a few more twitter questions coming in. rutherford b. haze, when did you think victory was all but certain? >> we call that going inside of the jar. i thought 10 days before the election when early numbers did not cut into our lead, because early vote was predict of whether or not your segments of the population were going to vote. if they were going to take the time, it was likely they were going to do well. they were all over performing on an early vote. i thought to myself we are going to over perform on election day.

>> something surprising this house that it was. there were a few moments, but it was pretty flat. >> it was. that is why -- going back to my issue, the public polls were crazy. they were all over the place. >> what searching and you need to do? would you need to do to change about how they are conducted? >> you have to decide whether or not you're going to [inaudible] some pollsters do not go to party, deal with cell phones. you cannot auto dial cell phones. if you're not going to put them, you are going to under sample youth and minorities. that is going to make your samples, older than they should be and not enough minorities. that is why some looked so difficult for the president because they were under

sampling. that is another place where they got it wrong. >> the majority of public polls were closed. within the margin of error. >> their last poll got it right. i think the more descriptive thing was two weeks before that and a month before that. it is all up and down, inside, back-and-forth. that is people who are getting the sample wrong. >> you think the state of public polling is what? >> broken. >> what needs to be done?

>> we have to have a discussion about getting more self loans into the sample, what the electorate looks like. it is expensive. >> politico -- what were you going to say? >> they give you a price. your prices more if you have a cell phone in it because it is more expensive. you do because you want your pole to make sense. >> you think even more cellphone sticky here is the truth -- -- >> here is the truth. raise your hand if you have a land line.

raise your hand if you have a self on. all those people -- i am not done renting. -- ranting. [laughter] we did an experiment using the gallup electorate. 20% of people would have gotten thrown out. 20%. they said they were not going to vote. that is a completely wrong screen. you are getting a raw deal and a lot of people are putting these polls on the front page. in the lead of the news, obama is down and he was tied a week ago. no, no he was not. he screwed up your sample. >> you mentioned cell phones. what else needs to change about the industry practice? >> what file are they using? are they doing random dial? are they using a list? are they doing a vote to file?

are they doing something that has new registered voters? >> we registered a 1.8 million on the doors. most did not get those people because they did not by the new file. they did not know they were registered. the other thing, figuring out what to the alleged sort of looks like. as you know, who is going to vote was a difference between their models in our models. >> why were they wrong? >> you have to ask them. they did not think our coalition was going to vote. they thought it would look more like 2004. >> what gave you confidence? >> of voter registration, enthusiasm, we can see our people excited. they were giving money. that was important. and early voting. when we started to see the

numbers come in, we ran a campaign on the ground to do this, we could see our elector it was voting at the rates we hoped they would. more than that. we started to say if that is true, we are going to be ok. >> if you would write a technology book about what you learned, what did you learn? >> it would be a big book. it would start with hiring really smart people, regardless of their age. give them a budget and support and hold them accountable. they will build you some amazing things. >> campaigns -- you hired technological people and people who were not political. >> one of the best pieces of advice i got from eric schmidt, the chairman of google.

he said you do not want political people. you want people who you are going to draw what you want and they will build that. that was very true. we hired a cto who thought we were crazy be in from mars. and we thought the same of fame. -- of him. we all, to get there, spent a year of learning each other's languages. then we would draw things on the white ford and say this is what we want you to do. build us a program to use facebook to get them to organize their friends. he said that is going to be hard and expensive. i complained about how expensive it was and then we built it. >> what did you learn from him a political person would never

have seen? >> what did i learn? i think what he learned. if he was sitting on the stage, he would say that in the end, they did a lot of things to make door knocking easier. that is what this is about. he said this to me, all of these people in his room and in every door around the country were doing it because of barack obama. we got people to take pay cuts and giveaway golden parachutes because they wanted to work for barack obama. >> is that true, this was the most expensive in history? >> totally. we had to weigh more than last time. we registered with more voters. we had more volunteers. 2008 was a magical campaign.

2012, we finally got good at it. we spent five years learning how to do it. the best story, in august, i went to a convention in ohio. this amazing team leader said to me, the simplest thing about the obamacare campaign, i have been organizing for barack obama since 2007. i know everybody in my neighborhood. i know the democrats who might forget to vote. i know the independence and i know how they make up their mind. she looked at me and said, the rounding guy just came from out of state. could you think is going to be better? that was true. polls showed we got a majority of voters that this side of the final day of the campaign. in part that was because of the president and in part because they got a door knock, let me walk you through why i, your neighbor, why i support barack obama.

they said i just saw this television ad and they said this about obama. the team leader said let me send you a facebook post why that is not true. let me make sure you understand. we could see those people were moving to west. they were moving to west at the end of the campaign. in an incumbent race, typically incumbents lose undecideds. >> we are about to get the hook here. you're talking about how surgical you were in getting out your vote. will swing voters, are they passe? will they not give the attention they have?

>> here is what happened. it is partially wide polling is screwed up. a lot of people do not vote like independence, especially on the republican side. you have covered this. people are registering as independents because of the tea party and other things. they look like independence. they are in -- they say they are independent but they vote republican. moderates is a better way to define them. those are the people you're going to fight for. independence, we learned that a majority are not independent. they usually vote democratic or republican. left in the middle are moderates. >> how many were on the bubble? >> hard to give you an answer. i know the president one that

grew by 15 points. >> one was the last time they decided? what was the triggering a for the group of true swing voters? >> 75% of voters that made up their mind by the conventions. >> what this typical? >> less than that. i know that is set an historic number. that shows the polarization the country feels between the two parties. so, the moderates way to a while to make a decision and then they looked at taxes, the

economy, jobs, and they went to the president. >> what is an emerging trend in technology or how people consumer information that will have implications for 2014? the leading edge? >> that is a good question. the prevalence of people getting their information online has exploded. you look as swing voters and how little they are watching tv, we all had three places you got your news from. now they get their nightly news from 15 sources. jon stewart is an important moment from that. if you are a democratic-leaning woman, you love rachel maddow. getting to those people is harder. they are way more online than anyone. you have to go to where they are. campaigns will spend more and more of their money online than

ever before. until it reaches parity with television. >> and you think television will still be big in 2016. >> it is going to be the dominant media but online is going to catch up very quickly. i think it already is catching up for young voters who are looking -- >> within a couple cycles? >> no question. i think the next election is going to have to decide, as we did, what percentage you spent online, it is harder than ever to reach people. there is a magical place you can reach every american voter and it is at the door. that is why the future of campaigns is going to go back. we beat them badly on the doors. >> karl rove says republicans should reverse engineer your ticket out the vote effort. >> i think they have to rely

less on super pacs. that was a crutch for that. i think mitt romney was helped by them. but once they got into a general, and you could spend all of the money on tv, and we were outspent on tv, but i believe they're going to look at our campaign and realize the messenger matters and we had a better messenger. and that we'd beat them on the doors. that really matters. >> if i am planning a 2014 campaign, what can i learn from you? what do i need to do differently? >> i think you need to look at online in a new way.

in 2008, online was about putting everything through barack obama.com. in 2012, we had a world where we program content to different places. we did not care where you consumed the content. on election day, we sent out one tweet. now it is prevalent. he did tumblr, a whole bunch of things that did not exist in 2008 just to get to people. i think you're going to be cross channel in a way that we were not at all. cross channel means you are going to be wherever the voter is. you're going to program content for facebook, google, wherever they are. >> let's pull back from online. if i am planning a 2016 campaign, what do i learn from obama for america? >> hugh learned the need for an online don't base that allows you to -- you learned the need for an online donor base that

allows you to raise money. >> this time he raised 1 billion tax 70% online. -- you raised $1 billion? 7% online. >> the most important thing i would say to any campaign is it is about your candidate and the message. what they're going to bring to this country. that is why millions of americans signed up. it was not because they got a t- shirt. they did. it was not because of a bumper sticker. they believe in the vision barack obama has. that is why we won the election. >> we thank our hard-working

politico colleagues and bankamerica, c-span for being here, those of you streaming, thank you to anybody who got up early for this conversation. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> former u.s. senator died at age 82. the republican senator from new hampshire was an influential member on a balanced budget and deficit issues. he did not run for reelection in 1992. several years later he said he had no regrets about not seeking another term. >> the question is did my retiring reflect of pessimism.

not necessarily. i have served this country for a long time in a variety of ways. that is where i met my deputy who succeeded me. i did private practice and ran for the senate, so 20 or 25 years of my life was in public service. i decided there were some other things i wanted to do. i wanted to write. i had a great 12 years. i did not think the next six could be better. it made me think long and hard, and i have never regretted it. i never looked back.

the greatest privilege the people of new hampshire could have given. that meant a lot to me. there were other things i wanted to do. the easy thing is to walk away. >> and a few moments, a look at education policy and school choice. a discussion on the evolution of facebook then a forum on how gaming can solve the world's problem. >> the name of this place still resonates with the shuddering in the hearts of the american people. gettysburg reverberates. americans retain the knowledge that weapon in -- that what happened here was the crux of our national trial, and even

americans who are not sure what transpired know that all the glory and all the tragedy we associate with the civil war presides most probably here. >> thursday night who lincoln director steven spielberg on the battle of gettysburg and abraham lincoln's legacy, part of a four-day weekend. now a discussion of education policy and school choice. he helped found the charter school program. he was also an education adviser to the obama 2008 presidential campaign. this is an hour. >> thank you. i appreciate it. i hope you learned quite a bit about the topic tonight, which is education. we are and invite only

organization of accomplished, dynamic entrepreneurs and executives. we believe in developing and engaging talent. our mission is generational opportunity. we want the future to be as successful as the past, and you hear some debates about our best days are behind us. we do not like that. we want to change it. don draper said, if you do not like the conversation, change it. we do cool things like this to get you exposed to important issues, important ideas, and hopefully get you active to make a difference and change the world, because you are interesting and successful people. your talent and resources could be used to be more accomplished than you are now. one of our issues is education.

education is arguably the most important issue. you talk about true preparation. there is a moral element, which is you are giving a kid a shot, but you need to develop human capital to get ahead and compete, especially in the world like today that is more competitive than ever common and and now and we are struggling of lot. -- than ever, and we are struggling a lot. across the country. you read about how people are suffering. we cannot refocus and marshaled the energy and priorities of our country to get ahead, so we brought a speaker who is extraordinarily influential and a true inspiration. there is a quotation that says, when it comes to the future there are three types of people.

there are those who let it happen. there are those who make it happen and those who wonder what happens. our speaker tonight makes it happen. he is a businessman. he is an attorney. he is a bit of an entrepreneur. that makes him a remarkable. i think what makes an extraordinary is he is a true leader. he was on the d.c. city council and helped start their voucher program. he wrote a book called voices of determination. it is essentially a testament to how kids can be a testament to adults and overcome great aunts and are true inspiration's region a testament to adults about kids. he advises mayors, congressman all across the country on issues

of large. he is in the thick of the game and a complete leader on the issue, and you feel his influence across the country. and we are very fortunate to who areple like thehim savvy please give him a round of applause. kevin chavous. [applause] >> thank you. >> you're welcome. >> i think i can go home now. [laughter] i was wondering who you were talking about. [laughter] michael is my brother from another mother.

we will talk about that. when he talks about education, it is true that while that is the focal point, it really is and should be the focal point of this country. i like to tell people that on my way to public service, i found my passion. i got into education reform largely because, as an elected official in washington, i would go to schools and talk to teachers. i remember after i was elected the first time in 1993, i would go to a school and i would see a couple of these bright-eyed kids in some of these low-income communities. carol and challenged neighborhoods and schools. i would say, what is that it's story? the teacher would tell me. those children, they seem to be so energetic, so much potential, and then, a couple years later, i would say, what about that

kid? what happened to that kid? they would say, he dropped out, he could never read. it struck me when i look at the negative social indicators in washington d.c., similar to other cities, they are -- the negative, social stuff was directly related to the lack of education. 90% of the inmates in d.c. were high school dropouts. in terms of homelessness, joblessness, drug addiction, there is a consensus now that if we increase the high school graduation rates in this country by just 10%, we reduce the murder rate by 20%. all of these indicators are out there that there is nothing more important than education. i just became passionate about this. even at this stage, 15, 19 years later, it is the only thing that keeps me up at night, to know there are children who will wake

up in this country who are going to go to school who will not serve them well. over a short time period, whatever potential they had that they were given through accident of birth, they will lose. there is something tragic about that. while we look at all of this stuff out there, this idea of having this one approach tailored to fit all kids, we put in a circle or a square, that does not work. what a child needs who comes from a certain dysfunctional background or a poverty background, that child can still get what they need to learn and we do not need to write that child off. there are countless examples of people, on to the north, educators, people who believe in these kids and investigate -- and invest in those kids, find ways to learn. we say that every child needs to take algebra in ninth grade,

what about that child who is ready for it in seventh grade? what about the kid who should be taking it in 10th grade? the problem with traditional public education, as i saw it, is that we do not meet children where they are. we force them into learning the same way and the same things. that is when i began to embrace change. what this change look like? in d.c., i was very fortunate. i was one of the people on the committee and now we have one of the most prolific charter movements in the country. the test scores are 20 points higher than traditional d.c. public schools. then we have our voucher program that allows kids from low income communities and neighborhoods to go for it -- go

to private schools. kids who go to the national cathedral, all these great private schools. we have got nearly 2000 kids going to the schools. it struck me after seeing the success of these programs that that jumps started some change in traditional d.c. public schools. now, all the innovations the school system wanted to do for many years, now they are beginning to do. where are we? in d.c., we have a long way to go. what i have found is that the innovative and creative program, what parental choice does when you give these parents options to help meet these kids where they are, it allows us to fly the plane while we fix it.

people want to put us in these boxes where you either support traditional public schools or you are against traditional public schools. a democrat and you will support some of the status quo pronouncements, or are you going to be a progressive and support innovation creativity. i do not think it is a zero sum game. i came to realize when it comes to educating a child, there is no republican or democratic way to educate a child. there is no black or white light. there is no rich or poor way. when it comes down to the basis of learning how to read and write and learn how to count, there are t -- two things that are important. a student there who wants to learn and a teacher who is a quality-based to has a passion for educating these kids. i have seen over the past several years that where we are

falling short is we are so stuck on the way we used to do things. it is really -- it has really affected our ability to be competitive. one of the first-ever analysis -- analysises of the education -- education attainment of all low income children in this country and their counterparts. and of all u.s. schoolchildren compared to school children across the globe. this report was interesting.

it has taken $2.30 trillion. money we would have at added to the economy of this country, but for our failure to educate these kids. now where we are is in a place where we are playing catch-up with a country -- with countries that used to want to be like us. it is so bad now that while our university systems are still where they should be in terms of reputation, no one from other countries wants to send their kids over here to go through our k-12 schools. we are at the point now where

what we need to seriously look at is what it will take to change the dynamic. in recent days, we heard about the teachers' strike. i think the big challenge we have is we put ourselves in these partisan boxes and we force people to take sides. you know the side that is never adequately represented in these discussions is kids. i just posted on my blog, how will a teachers strike in chicago help kids? after getting all of these responses from people who love teachers, are mad at teachers, i had 40 people immediately respond and no one can answer the question. teachers do not want to have the evaluations.

or the 10 year issue. the teachers want to make sure the first ones who are hired are the ones who are laid off, where some of the ones who are laid off will be in the classroom. no one talks about the fact that anytime you take these kids out of a classroom, particularly kids who needs more time -- who need more time, they lose. who is thinking about the children when it comes to these issues? recently, in boston, they reached their agreement and they have been fighting for the past two years and their contract that they just agreed to in boston is very similar to what is on the table in chicago. boston has a no-strike clause. they got a mediator from austin d.c. to work with these folks.

they settled this thing. at the end of the day, no kids lost time out of the classroom. we are at the point now where we need to evaluate the educational proposals based on one simple yardstick paraquat will this help a child learn? shouldthe answer is yes, we be for, if the answer is no, we should be against. solutions like accountability and quality teachers, one of the solutions is also apparent choice. i have seen that go run the country that the more parents step up and speak out and pressure the system to change, the more they have to respond. the fallacy is that we expect that bureaucracies will reform themselves from within.

i do not know about you, but, in my experience, i do not know any example of any bureaucracy that has changed from within. the only -- they only change their and external pressure. the best form of extra oil pressure is parental choice. it is people who -make a difference. if they see parents with the benefit of all the schools that they otherwise did not have, in a good charter school or private school, and they can go to the neighbor school for the next kid coming up and say, my cousin has it over here, why can i not have it over here? that is what is going to change the system. we need to change the miss and -- mission.

one of the reasons is the mission was not clear. the mission in our school districts are not clear. do you know what the mission is? it is not what it should be. we need to realign the mission in a way where there is only one thing that is important. that is the academic attainment or achievement of these kids. right now, that is not the mission in chicago. the mission for the teachers' union in the leadership was we want to maintain the integrity of tenure, we want to make sure we are not giving evaluations we do not like, and we want to make sure we get a powerhouse increases -- get our increases. nowhere in the discussion was there talk about the academic

achievement of children. if we go back to my general proposition that we need to make sure we have front and center, will the child learn, just imagine if school districts across the country adopt that as their mantra? . one thing that would happen is if we allocate money on that basis and everyone knows the goal, you understand if you have a common goal as part of your business mission or objective, and you taylor everything you do and have toward meeting that goal. our objective, our goal is to have all of our kids at 90% to 100% proficiency. what do we have to do for little

johnny or jane who come from a poor neighborhood? cannot get to 100% or 90% without them, so what to do? we have to have the best teachers, the best resources. the way it helps teachers, and a lot of teachers complain about now in some of our urban school districts and schools where they do not have supplies and blackboards, all of it is taken away because a lot of the additional extravagances we see in central administration, everyone's main goal is the education of these children. that is something we need to focus on. finally, and i want to make tried to questions, i know there will be a lot of softball questions and i look forward to that -- [laughter] we have to feature the stories

that work. i decided to write my book because, as i go around the country, i had been to nearly every state and when i give speeches and visit schools and talk to leaders and policy makers, i generally try to visit schools. i always ask the question, coming that kit's story. just like they did when i first -- tell me that kid's story. just like i did when i first got involved. i am amazed at the resiliency of our kids. oftentimes, it does not take but one or more little positive influence in some of these children's lives to change their life trajectory. even though we saw in chicago, we see it when people talk about performance pay, when people talk about no child left behind, it is so easy for it to

feel like it is not personal to us. the policy stuff is like numbers were words on a page. if i would the wall around the country and visit schools in america and find out that k's story and this kid's sorry, i would say, we would have to share these stories. we are in a nation of storytellers. when you hear the stories come when you connect with a story, when you connect with a passion, when you connect with the challenge, it helps you get motivated to embrace solutions that work to meet that challenge. i ask a great school operators around the country to introduce me to some of their most successful stories, kids who went through challenges but overcame the odds. like the farm girl in indiana who was a member of the national

honor society but knew she was not up to grade, up to her grade level. she used to scan pages -- skin pigs. she was an old school country girl, 14-year-old. she wanted to be a veterinarian. she could not be a veterinarian when they were giving her grades she has not earned. she begged her mother to homes cooler. her mother said, i do not know what i am doing. they found out about a charter school. she went there and found out she had a learning disability that had never been diagnosed. turned her life around. now she is doing terrific. or the young man who was at a

high school in st. louis. the teacher ended up knowing this guy had challenges was as much which it with his mother. -- had challenges with his mother. the goal was to graduate. the teacher knew his mother we can out of the house of so often at 15 years of age. the teacher noticed this young man was always at the school. one night, while donald was nodding his head at a meeting, where he was the only one under 65 there, and he was waiting to eat the snacks they had assembled, the teacher hid behind the locker near the cafeteria and followed donald down the hall, up the steps, down the hall of some more steps, about 9:01 night, and saw

donald climb up to the roof of a boiler room and realized he had been living in the school. donald had been living in the school for three months. he had gotten into a fight with his mother. his goal as a senior was to graduate. he did not want to go into foster care because it would throw him off. the teacher found a place for him, he graduated, and then he was able to go to army. the first one to graduate from his family. these stories are real. they are not about whether there should be a charter school or a traditional school, or a private school, or a high -- or homeschooling, or religious schools. they are about making such your -- sure we have a whole menu of options.

so that we can meet all of these kids where they are, like donald or jamie. or like ronnie who grew up in public housing and his best friend was going on the route of being a gang banger and selling drugs and ronnie, for some strange reason, 13 years old and loved writing poetry, quietly found the teacher who would mentor his writing of poetry, won a poetry contest, a scholarship to go to college, neighborhoodin his in his whole public housing community that went to college. what is even more telling, because of the pervasive nature of drugs and crime in that community, he was on a football team at 14. by the time he was 22, 18 of those 22 teammates were dead.

two were imprisoned. one, they did not know what happened to him. he was the only one to graduate from college garrett ronnie is the first -- from college. ronnie is the first one to tell you that he had someone who and believed inhim him and made him feel like his love of poetry was not weird. that changed his life trajectory. i try to share stories like ronnie and jamie and donald and others, all the verse, all coming from different walks of life, because that is the american story. those are the american stories that are out there that do not have anything to do with the note child left behind or the chicago teachers strike, but have everything to do with those

things because that is the sole of the issue -- soul of the issue. if we are going to change the life trajectory of these children, we have to respect their needs. we often -- we need to make sure those adult interests that predominate, they need to be front and center away from the equation and we need to put these kids where they need to be, put their interests first. one final thing before i take some questions. i happen to be on president obama's education policy during the 2008 campaign. they did not kick me off. i survived. [laughter] they may have wished they kicked me off but i survived. how it is interesting to me, if we look at this presidential

race, and, already, people are drawing these artificial lines in the sand about the republican education plan, the democrat education plan, and i offered a suggestion, i assumed the role of speech writer for both of them before the convention, and i sent a script to both of them, and i said, either one of you can buy at this. you should start your nomination speech in the similar following manner. "there is a lot my opponent and i have to disagree over. i want to talk about the most important issue facing the future of this country. that is the education of our children."

all too often, we have put ourselves in a position where we have not allowed for partisanship. we have allowed for partisanship to dominate and dictate our policy directives as they relate to the future of our children. we will and that. -- end that. i will suggest to my opponents that we meet one on one and we sit down without any staff and we lay out a prescription of issues to be addressed to make sure we fly the plane while the exit and educate these children. we will understand we are not guided by our party leaders, but

what is best for the future of .his country pierr you cannot have a solution without a blue ribbon panel, so we will have one on both sides to hammer down these issues as we move into the future months. going forward, if i do not win, i support this process and will work to make it happen with the new president and i respect my -- i expect my opponent to do the same. this is so important, that american competitiveness will fail if we do not start educating our children. where we used to be number 1 in math and science compared to other industrialized nations, now are -- now we are in the 20's. we still have some great schools, but some of those good schools are not as good as they used to be.

it is not a problem that this affects or else lower income children of poverty. it should not be based on the politics of the day." [applause] what is hopeful, what is exciting, here is that we are seeing that approach happen in some states, where a republican who workedke bobby, with democrats to put together a state wide scholarship bill. in florida, they had the scholarship program, for kids to

get scholarships to go to private schools, when that was passed 10 years ago, we had one member of the black caucus vote for it. when it came up for renewal, we have the majority of black and hispanic caucus vote for it. each of them said we are doing this because it is helping our children. as we move forward, that has got to beat the order of the day for our country. thank you all very much. i appreciate your generosity. i want to take some questions before we have to wrap up. thank you. [applause] k you very much,. . i appreciate what you are doing. in california, we have not adopted as much, doctors and

twice as you have seen in washington d.c. when we introduce choice, the public schools, the bar will rise because they have to keep up with the charter schools. is that a belief you experienced in washington d.c.? what happened to the public schools and how they performed when that 42% to place? >> it makes a difference. i do not think you can have reform and education without choice. without choice, there will not be an incentive for the bureaucracy to change. it is easy for people to fall into the category of, if you want change, you push for change. i support public schools. i gave teachers the largest raise they ever got, gave the

schools more money than they asked for, their test scores and results went down. more money, your kids come and the task force went down. that is because it is like a blob, bureaucracy, like a vacuum cleaner that sucks away the money from the local schools and pours it into the central office. you have all of these cost centers and all of these purchase resources. when money comes in, studies show you are lucky if 60 cents on the dollar goes to the classroom. in some places, it is far less than that. you have the assistant to the assistant deputy to the assistant of the assistant deputy. [laughter] i had a hearing in d.c. once and the superintendent was there.

he was going through and i would ask him questions about the budget. did we not give you money? i said, you will testify. i start asking, what do you do in your day? he says, i am the assistant to the assistance of the assistant deputy. i make the books get in on time. i say, how does what you do from 9:00 to 5:00 belhelp johnny lead over here? he says, i am a central employee because i am the assistant -- ok, fine. through these other options, we

have learned that we are finding possibilities. parents are saying, wait a minute, if my teacher it needs a blackboard, they do not have to requisition downtown and get five people to check a box and maybe get it or maybe not? whiow. they will get a computer and folks know how to work a computer? i am not passing the schools, but the reality is on less people know about what is possible, -- and less people know about what is possible, they will -- unless the people know what is possible, they will not ask for it. you do not know what to ask for. that is what is happening. we are seeing in florida,

louisiana, indiana, d.c., milwaukee, and people now, what is happening is you are seeing in california, when parents are saying, i am mad and i will not take it anymore, for the first time, there is some momentum for change. the one reference point we can look at is detroit. when they changed their mission from making sure they had a jobs program to quality cars, it changed everything. it improved the work product. the competition, people would

buy japanese or china, the consumers will be educating consumers. we have seen examples in these places where you have a robust choice program, a robust pressure, it just starts change. one superintendent, who i will not call the name out, said to me, you keep pushing this thing because it helps me light a fire under my folks. thank you. >> kevin, thank you so much for being here. i gave your book to my 12-year- old niece, who was in cash plus school. after reading the book, she said, i want to go to public school because i want to meet those kids. [laughter]

changing gears to chicago. you have 350,000 kids there. 40% of those kids are not graduating. there is significant poverty. where do you see that conflict ending? they are looking for teacher evaluations, pay raises, to end tenure, clobber school days. -- longer school days. yet parents who are not engaged in the process and so the kids are at the whims of adult interest. >> i think the mayor is right. he is right not for the reasons a lot of people say he is right.

he is not right because he did not blink. it is not because of that. i think he is right because we need to elevate the discussion. we need to elevate the discussion away from the in the sixtheviused -- in the 1960's, and what we need to use in 2012 and beyond. in california, teachers get automatic tenure for life after two years on the job. they do not get evaluated and they cannot be fired. in this state, you cannot even fire a pedophile. it takes years to fire a pedophile who is a teacher in california. there is legislation to allow the superintendents' to fighter pedophiles and that did not pass because the union block it.

as opposed to being excepting of the -- accepting of the old job rules and situations where people cannot get evaluated at all, we need to talk about what accountability should like -- should look like for children. i am not saying if every kid does not get 95%, the teacher should be fired, but it should be an indicator. in boston, they agree to this new deal to the evaluation scores, 25% of the teacher's evaluation will be based on test scores, that sounds reasonable to me. you get a group to evaluate

teachers, you have to have some objective accountability standard. hasted be on -- based on what the kids are doing. he did a good job elevating the discussion. when i asked questions about how this helps a child, i do not want the response to be, we are standing up for our rights. that is not the response. to me, if our admission should be -- mission should be these kids to learn, adults should have to take a back seat. now you have got an interesting mix of urban political leaders and you have got some conservative legislators.

some of these urban leaders are doing it because, it was said to me, in my district, i have 70% of the people not working, i have got a war zone, and i cannot get bill gates to bring a business. i have no economy. the only way to change that dynamic, in my urban neighborhood, is to have a more educated population. you have got these city leaders who realize their economy is eroding with every kid who dropped out.

if he allowed the same to go in place, does anyone believe it wouldn't affect the dropout rate? >> you talk about foreign competition in china and india getting ahead of us. is the model we have in place for teaching our kids that was built in the industrial age sufficient for the information age? >> that is a softball question. [laughter] >> realisticalno.

when we built as education system, summers were also taken work on farms. that is why we have the schedule. when we put that system in place, there were no cars, planes, were electric lights. computers, on and on. we have anline is over allegiance to the system based on the stock to a. my mother went to the school. my grandmother went to the school. you cannot close the school. 95% students were failing and parents were still fighting for the school.

i ask them and they said, my grandmother went to the school. i would say, the grandmother passed? your kids are not passing. [laughter] if you are failing 95% of the kids in the school, either you are going to change or we are going to shut you down. we should be consistent. it does not matter what kind of school it is. shut down the bad charter schools. we put this model in place and then what happened with the records rights and teachers union -- with the workers' rights and the teachers' union, it helped to prop up the system. it is so easy for folks to see this and say, you are bashing. i am not. if you know a teacher who is a good teacher, they will probably

confirm everything i am saying. the good teachers hate when they know the teacher who has the kids the year before, they know they will have to be unprepared and they will have to work twice as hard to make forward. they which they could get rid of that teacher, but they cannot. to embrace the information age, we are in the-- we canno 1800's. that is why others are blowing us away. they started overtime in taiwan and belgium, they look at what we are doing and then they grabbed hold of this technology opportunity as a way to blend

learning, virtual learning, accountability, a comedy -- autonomy, choice, making sure teachers are judged based in part on the performance of their kids, and this turned around did not happen overnight. we have to divorce ourselves from the history of how schools started and in view it as a continuum. we need to move beyond that neanderthal state -- face and start walking on two legs. instead of all fours. which is what we are doing with traditional education. >> you talk about choice. you gave the example of detroit.

they went to a capitalist, competitive, is there any direct conversation capitalized -- happening about let's capitalize education. as we all know here come when there is competition, the bar rises. ones that are weak fall to the sides. >> this is the way i view it. i do not think we need to be overly prescriptive about what the right education model looks like. the one-size-fits-all. i think each community has to -- the first thing is to expose varied approaches and options to the family and community, and

they will gravitate towards the things that may work best for them. i tell my friends, because, i love the tip schools. they are great. but not every school can be won. there are some folks that say we need to have everything look like that. i think we need variety. frankly, that engenders more competition. everybody likes starbucks. i have -- i am glad we have these other ones. [laughter] i want to make sure we do not get so committed to the solution being one solution or the solution. when it comes to education, the dynamic nature of it is we should have a perverse offering of selections from parents and families. -- i diverse offering of

selections from parents and families. >> you are dedicated to this cause. if you were to say one thing we could do in our community to help change, here in california, 10% state tax, we see where our dollars go and not performing in school, many people go to private schools, what would you say to us? what is something we can do? >> that is a great question. first of all, we have got to have courage. one of the reasons why we have not had changed is because there has not encouraged to speak. i cannot tell you how many times i have given speeches and i have said some of the things i said tonight and christians say, keep saying that, but i cannot do it.

first, you have to have courage to speak truth. all of you are successful. when you see your elected officials, you see people running your schools, you need to ask them pointed questions and not take the normal platitude or feel-good stuff. more money for teachers, larger classrooms. all that sounds really good. what are you going to do about the work rules? what are you going to do about making sure the principle can run their schools and not have programs hoisted on them that come from the outside, or have someone from downtown who has not been in the classroom for 35 years. box.k a

i am not running for anything. we are good. [laughter] you can go to these folks and ask them questions and challenge them. do not accept the same old answer. the other thing you can do is one of the reasons why i want people to read my book. everybody has it within them to help another child in need. do something i will give you a quick example. there is a friend of mine who i went to law school with who asked me, she said, i have never been married. i really feel like i want to help these kids. give me a suggestion as to what i should do. i said, you should go to a community hospital. you should hold some of those

crack babies. they have a shortage of nurses. they need to be held. they do not have enough nurses to hold them. you should offer your time. she started doing that. holding some of those babies who were born addicted to drugs, that may have helped change their life introductory. at that early, -- life trajectory. at that early stage, just being held is one of the best things that can happen for those children. each of us can do something. figure out how you can help a parent learn and do not be afraid to speak. that is something we did our leaders a pass on. >> i would like to acknowledge you for the work you are doing. it is something we all appreciate as we are busy running our businesses. and living our lives.

i saw waiting for superman -- "waiting for superman." it out raised me. i had no idea about the things that exist in the system that are really devastating. as somebody with your viewpoint and seeing things all across the country, other any examples that are evolving that we can look at as an example of progress or success that we can look at and kind of understand, where is the hope in all of that. >> a great question. there is another great movie back down.""won't you have a teacher and parent coming together to change the schools. talking about the stories is real important.

when you see "waiting for superman," i know all the statistics, but as soon as i sought, i needed to know what happened to daisy. i found out she did get into school. florida is a good model. jeb bush is on another side of the political spectrum from may, but he did a good job of forcing florida schools accountability. right now, several years later, the african-american kids' test scores in florida are on par with white kids in the rest of the country. by putting accountability in and giving some examples of opportunities for choice, he created an environment for these kids who are far behind and are

now moving forward. some of the stuff done in new york was amazing, particularly the principles academy, where he had a goal to get some of these strong principles to get into management sessions. he had a pipeline of them. those teachers put pressure on the traditional teaching pool to be better. the models are there. like it or not, most of education will be driven by state agendas. that is why the work you are doing here is so important. the state leaders have to be

responsive to this issue. they need to put these kids first. we get them to do that, and we can change this. thank you. [applause] >> this is our custom, so you can write down your next speech. [laughter] you can enjoy a glass of wine. >> do you have a corkscrew? [laughter] [applause] >> and, cut. [laughter] >> our prime-time schedules marmite begins at 8:00 p.m. eastern with an analysis of the election by david plouffe and

steve schmidt. anne marie slaugther talks about the challenges of balancing work lives and personal lives and how that affects policy. jeff fager spoke to students at arizona state university. in a few moments, a discussion of the evolution of facebook. in less than an hour, a forum on how gaming can solve the world's problems. after that, leon panetta at the center for a new american security. and for 90 on the economic outlook -- ben fobernanke.

david savage, phyllis energy, and the enreg bill. "washington journal" is live every day at 7:00 a.m. on c- span. >> they are using a mobile phone primarily to access facebook because they have not had access to a laptop or pc. in a lot of cases, there is not an infrastructure media in communication that you have in the u.s., a lot of americans will say, facebook is great for gossiping and seeing what my friends are eating for lunch, but if you

were to talk to somebody in the middle east, you would hear a different story, which is that facebook was providing access to news to people who had unique access to information they were not able to get at otherwise. you get a much more meaty story about what facebook means to them. >> more on thanksgiving day on c-span. at 2:00, ct justice john roberts. -- see chief justice roberts. next, a look at the evolution of facebook with the vice president of products, chris cox. [applause]

>> thank you everyone for coming. this is a bit of a tree. i have been covering facebook for years and you rarely see chris cox out here doing his visionary thing. your title is one of the suspiciously vague titles. what do you actually do on a day-to-day basis? >> over the last three years, i have built out the product management and design team. a bunch of engineers, a product manager, and some designers. i have been responsible for building out the product management function of facebook. >> for people who might not think of product the way you do, what is that on facebook? >> the "like" button is a product. news feed. it is an interesting twist on a product.

a lot of consumer technology companies would be like a single player game. you are interacting with a service, the service of stuff in response to you interacting with it. facebook is a little bit more of a medium. the product is more like building a container that moves around ideas and content in a way that is predictable and easy to understand. >> you have been at facebook since 2005. seven years. you have done a bunch of different things. one of the most interesting is you came on as an engineer but you moved over to human- resources at a certain point. what were you looking out of -- looking for out of facebook employees. you have thousands of resonates. what made them a facebook employee? >> we were looking for imaginative people. scrappy people. a lot of the folks we were interviewing at the time were coming out of stanford university.

we are interviewing a lot of engineers. there were some types who were super academic and super slow and meditative at how they approached their daily i was one of those people and there was another type of person who was the experimental and fast-paced and were builders at heart. they got their joy out of building. and watching people you something and learning how they could be better builders and people could interact in a modern way. we were looking for that sort of packard-builder tight. >> what was the most unusual hiring story? someone had facebook and you hire them. >> that happened.

two stories. one was hiring the college professor that taught me how to code. i walked into an interview and i did not know who i was going to interview and i walked into the room and there was this professor, jerry king, who taught a few classes on introductory computer science. i was used to asking computer science questions a lot. out of that class that he had taught me. what joy ask him? >> what did you ask him? >> i asked him a problem w-- a graph traversal problem. hydrograph one of the board and we started talking a lot of which are applicable in social networking. >> why did you want to work for

facebook? >> i asked him that as well. we had some people who were young hackers. there was this kid who created a hack so when you look at their profile your profile would turn into a myspace account. facebook was a blue and white, english only, college kids only. everybodypace was what thought of. >> one of my good friends, i remember going to stay with him howhe said we don't know

we're going to catch myspace. seven years later. in an alternate in a verse where mark zuckerberg goes back to school or does not get funding, he gets in a bicycle accident and does not decide, he can i continue. how different you think the internet would be if facebook had never existed? >> i have never got that question. i imagine it would be pretty similar. maybe a prolonged time frame. i tend to think and a lot of us tend to think that a lot of these technologies are going to get billed at some point. it's a question of when and by whom and the qualities it has and what is the story behind it? and believe something like facebook would exist. i do not know if it would be as big right now i and 2012. >> 1 billion users.

>> facebook got up to 1 billion active users which we do not know how to think about, frankly. i think mark had an incredibly clear vision that develop quickly and he got this massive opportunity dropped in his lap. i think he rallied a bunch of people wrote that the -- around that. you have to think that something like this would have come about maybe more slowly. >> i wonder how you think about -- sharing thing preceded facebook. the amount of emails or instant messaging is still huge and it dwarfs all traffic.

facebook, the way you share and making it index of all, searchable -- indexable, searchable. how you structure it? >> we talk about facebook being a medium and the idea is a good medium does not interfere with the message. it provides a container that is transparent, easy-to-use, reliable, fast and honors the message of the center -- sender. >> is it possible to have a medium that does not alter the message? >> marshall mcluhan said there is no such thing as a message without a medium. they have th e proper -- the property of being easy to use.

it is on a giant flat screen monitor in palo alto. it is on all kinds of devices and the medium needs to be something networks. we look at things that are simple to use as speech. like commenting or liking are sharing. we do not create new words or a new name for product that is just about commenting or messaging. the message product is called messages. our news feed product is called news feed and our photos product is called photos. it may sound silly but you get into these discussions and there is an inherent bias for a lot of builders to create something that has its own brand.

that is what most consumer products do. facebook has started from the idea that it should be sort of like a glass. it is clear and as much as possible, really is the intention of the sender. >> want to talk about the diversity of users that facebook has now. is anyone in this room, did they get a smart phone before getting a computer? >>you like everyone here, we have computers and some way of manipulating this cursor on the screen but the last few hundred million users and presume bullet -- presumably will be people who got a phone before the got a computer. these mobile first users, water the different and what have you learned from them by watching

how they interact with facebook at each other vs. people like us. >> the average new facebook user is india, indonesia, or brazil. there are using a mobile phone to access facebook because they have not had access to the broadband laptop or pc. infrastructure like there is in the u.s. people here will say it is good to hear updates from france. in the middle east, facebook provide updates to news and people who have any access to affirmation of and you get a story about what facebook means to them. i -- that is awesome. >> do you notice things that they behave differently like a

system? they sure more pictures, less links, or ever want interests the same why? >> one interesting thing is cameras. which is something inter esting thing. four billion may have access to a touch screen, a gps, a touch screen that was more powerful than what sentence to space, hopefully for a cheap price. we look at that and we say, all these people are going to have video cameras and cameras in their pockets and they will be able to have a lands and to the world that they can share with us. we look at found as being not

just consumption devices but also publishing tools and that is an exciting way to think about the adoption of mobile phones. >> do you think these people are born to be like billions in the world, will they be mobile first or only? a lot of the reason people are using phones first is that they are relatively inexpensive. will the transition over? i think they are but i feel like i am in the minority. >> a lot of people will be mobile. just because of the geography and the data available where there. pc's are not going to go away. you'll have a-- moment that your breakfast table or your couch order desk at work where you're going to be sitting down and computing and you want a big screen. there's no way around that. >> for me it is the keyboard.

we talk about this group of people, 1 billion people. should facebook have some elected body that governs the site? >> we do take a lot of feedback and we have a vote that goes into effect everytime release a new terms of service. we did go out of our way early on to end of the user base and give feedback on and approving the release of new terms of service. we decided not to have votes on new features, and we did talk about it. if we look at that features, it would be allowed to see who looked at my peripheral, i want music playing, and want to

decorate my wallpaper. we looked at those and said those are reasonable but if you look at the way people are behaving, you saw much more interesting ask, i want tos ee what is goingee on with the people around me. i click in to see if anything has changed. we use a behavioral analysis when trying to determine what product will be successful rather than a vote. >> what about the elected representatives? largestlike the world's agglomeration. some have elected bodies ofpeople people. something the gives the user is a vote. >> it is an interesting idea.

>> that means no. [laughter] if you go back now and look at what mark zuckerberg was saying, he was open with the idea that the wanted everyone in the world to be an facebook. what is the thing that now you are completely open about the ambition but it happens in three years or two years or five years, we're going to be like, what got word that -- where did that come from? >> mark talks about categories transformer to be influenced by social media. you are seeing that with news and more with -- the way that

people this cover and -- news coming from social media. >> how many people here get their news from social media? i do. you kind of get your news from social media. >> if you think about what is happening in categories, there is commerce and travel and shopping. these are right now one player games. if you think about your going and deciding where you're going to stay on your trip to bangkok, you are interacting with a collection of documents written by relatively anonymous people. the same is true in deciding where to eat, finding a pair of jeans, and a lot of decisions you make when you're online. we'll see the way the world is

going, we will make more of those decisions with a computer in front of us. which hotel to stay at, where to eat. maybe one day who to vote for on proposition 21. we look at that as an opportunity to turn it into a multiplayer experience and not just facebook but the ecosystem of social media and developers. you can imagine that the travel experience of designing a trip to bangkok is one that is influenced by where your friend has stayed, i bet you will have dos and don'ts, a great place and a beach you thought was beautiful and the temple you would have avoided because the line was long and a piece of it like she might have for a traveler. all that stuff israel. if you had a phone with you, you could press a button and legal little trail there. when you showed up you could see that this is what people had done.

that starts to be a compelling way of thinking how computers cancer to be more of a conduit of the lenses of your friends in the people you trust and anybody in the world rather than an internet connection with a screen on top of it. >> won the presuppositions of that is that you need a persistent identity that is attached to every person in your life. that has a memory. this thing has to be searchable and be in place over all the times in troops and things. the uc that as a novel view of identity or are you replicating something that is occurring in the real world? >> so phones are something you have with you all the time. you only have one phone and you

do not share with people. your the one person who uses your phone unless you are sharing some 1's photograph. it contains all your information. the applications you use. facebook, we think about it as an opportunity to connect. if you're having a fallen and a tabloid -- tablets and you have hundreds of applications and it will have lots of content behind them. facebook has become this that led to transport that this is my friend or let this person's music or this is -- is set of transporting this, to provide a continuous experience on your behalf. with that caveat that if you want to log out you always can. >> one of the concerns i hear from people is their kids are doing things now there are going

to be attached to them over the long haul. in the past you are 19, maybe there is a couple of polaroid's plan around. you are able to move on from that period of your life. could you build forgetting and to freeze production? -- into facebook? >> you could change something that each person was in control of the representation people put on their profile. ing wasthe unique th ing privacy controls. that was only possible if you had a system that knew who

people where. you can amend the way you portrait yourself. what facebook has provided as a set of tools that people -- let people ramiya. -- remediate. on the small side, someone posts a picture of you and you want them to put it down. facebook is designed to like a billion person conflict resolution machine. diminishes the current work they do but it also has of these other features in terms of

getting people back to the person they're having a dispute with. give them some numbers because the scale of it is like ridiculous. there are 7 billion photos of bloated every week. we are dumping massive amounts of published content. the internet in the 1990's, were trying to imagine it, it was like these web pages and it would -- a new web page would get treated and a few hundred or thousand would get at it but it has been exploded. if you think about instagram and the ecosystem of services where hundreds of millions of people a day are writing the

internet. it's not like some are creating it and others are checking this out. it is these tiny bits of, 10 -- content. a lot of people would write us a letter. dear facebook, i don't like this photo because i look kind of chubby. >> it was a pretty bad picture. >> the tool, you can report a photo. case.n't supporting this orwasn't this is illegal

misleading, it was this is embarrassing. a group at the university of berkeley studies the language of compassion and comes up with the best tools to help people mediate a problem and directs the message to the person that posted the photo. what started happening is this really cool thing which is people started resolving their problems together. the publisher gets the feedback. it would be one thing -- you should think more about this. we were able to build a set of tools so people can result of -- reside quickly.

>> you're getting hundreds of movements like this. >> i do not know the number. >> this is smart to have tools. people often times when they are suicidal, making me feel down and suicidal. let's say you feed that. how did you do with that as a friend of someone who is saying these things. we developed a process. it will be thousands of people will get help. because of the scale of the thing. facebook is like an american company. do you feel like there's some

set of values that are embedded? the mission of the company is a more open world. which sounds american free speechy. >> top the -- to the extent that this could be argued, you can put a message in a container and send it to whoever you want and that is something you should have the ability to do, unfettered. that is something that communication technology has made faster, easier, and cheaper since the beginning of time. one way of looking at facebook is one more step in the process of making communication from what is in your head to what is in line. periphery in high resolution. quickly. that is what facebook is doing. we view ourselves of the highest

level. the users and the product is international. we bought tools so facebook is available in different language countries. and in most island languages that are available to the internet. how to use the word like. the process of tranalsting. this is a tool that has gone above and beyond the united states and that is something we should be 6 bided -- supporters of an excited about. >> twitter works like everything goes out there and it is a --

everything that people post, it is there. those were your free book looks like. facebook has the sort of model. maybe you can describe how that set of filters work. >> the basic problem is there is more content created every day by the people around you. it is growing quickly because we of cameras and we're sharing more and more stuff. and people are connecting to more than just their friends, they're suggesting -- they're committing to these individuals. each person has all these channels that are publishing stuff of everyday and i have a fixed format. maybe they are on an iphone or

dan android pc. you want to give each person the best possible handful of pieces of content for them at that time. that is a growing problem. it is during free quickly and we believe it is important to solve. there is a bunch of machine learning, a bunch of infrastructure to assemble for each person. one thing i think about this is your publishing for each of $1 billion ever met. in needs to stab today. there is a model that tries to project is most likely to get air active with optimizing -- news feed optimizes what they would like to interact with. what will create a consumer of between the publisher and consumer? that is the high level.

>> you think about how that system works for. lettis positive feedback. you'll get more of that thing. how do you tweak the algorithms so people ill don't show up -- it is a personalized newspaper. how do you now the difference between how they interact. people want to have both interactive, one more often but they want to see the other one and check it out occasionally. >> the main thing we rely on there is people. one of your friends posts the article. and some of your -- there are

people who are posting articles about a particular thing, they're people who are noisy and do not speak very often. there are people who are domain experts in. to hear things and sure a lot of music. there are people who only share photos of their children. for their cat. one of the things we do is preserve a balance so you're not just seeing one person or thing. that goes along with what people tend to enjoy and address with. there is a little bit of diversity and a little bit of a coin flip. >> how would you like to sit at the controls knowing that you will find out?

is an incredible supervision. it is something that is exciting to do. it was the first hard i spent. nobody liked it. imagine spending 10 months in a secret starter. your working on something. your friends ask you, what are you looking at. h re were people i hadn't eard from. what did you do to my home page? we waited for the positive

emails to come in and i think i got one from my ommom. we tried to understand what was going on and we talked to neverland. you ask korff feels. if you walk outside the door. it is not just this big number out there. is knowing that everybody in life is on your side. to give some doubt it -- and dollar value, and it most people would have said this is -- this failed. we believe that the conduit could be built. it was easy as putting -- pulling a fall in output of your pocket. we -- when we watched people use it, what the hot -- people were

using it a lot. and it will wait for two or three weeks and the e-mail is gone and we will we killing mailing headlines like ms. feehan, were graced finger while -- this is the greatest thing. you go back and look at the f irst radio and everyone said this will invade our privacy. they will call and i am not home and it will break into my house.

telephones are probably good on balance caller id. caller id rget when colored gu came along. you look at the net in 1994. this is what the internet is. sandra bullock wakes up and name enter the internet. she -- when she wakes up she has lost all her bearings and were given the message that this was what happened when you used the internet. i think it is prove that we're not very good at understanding

when it comes along what is going to be eminently valuable and what is a reaction to something that is different from the world we're used to living in and that is the big take away. open it up to questions. we have 40 minutes. there is a microphone coming to. right there. if you'd like to give your name that would be wonderful. my question pertains to the impact of facebook on democracy. i am concerned vis-a-vis the fact that rogue government is able to shut down internet savesources.

are there people who help keep facebook at running? i am figuring out how it can be effective in countries that are closed with their communication. >> we do not have spies that i know of. i am not a spy. >> if you were, you could not tell us. >> we spend a lot of time and energy making sure facebook is available. we spend a ton of time on infrastructure and hiring people to make sure that you can get to that news feed. when it comes to governments that shut the internet off, that -- there is not a lot we can do.

it is interesting that young people -- i had a friend who spent time in iran wanting young people use technology. one of the things he observed is the way he put it is the average 18-year-old knows every last detail of how bluetooth works on their phone, all the internet and facebook, the ins and outs of twitter, how to change your -- and the setting so someone can message you. every last detail their understood. when he asked them to are you afraid of the government finding it, they would say they do not understand how this stuff works. it was a message that -- in places where people do need an outlet or way of communicating that is not necessarily available in the public domain. it is a completely different animal. >> we have written about this issue on the security side.

one of the worst things that happened, people log in and the government puts middleware in and that allows them to capture their password. if you do that that is the issue are wrecking their servers so they have a lot of resources behind stopping that from happening. you know how often times they used to be like http:// and now it is https:// and that has to do with increasing security and helping you out. another thing with hackers. the biggest breaches tend to be,

there is a pizza place that stored everyone's credit card sitting on a box. whoever ordered a pizza, a bunch of hackers got into it and it was 50,000 credit cards go down and that has happened many times multiplied by these legacy systems. and has been bad in terms of crucial data. >> i was curious around this concept if you had a discussion around the muslim video that came out, did you have conversation if that happened in a facebook context and if you think about this super country aspect that you are providing and what the effects are going to be and what the short-term things are compared to salman

rushdie now and what is happening? >> i think of that video as a product of the internet. >> that video -- we do not know the whole story of what was going on. the fact that i do not think it was a spontaneous thing. you had that video get translated and move within the social circles in the world. i do not blame the internet for it. you could have that like a regular news station and it would have had more effect. >> i was wondering if you could say more about monetizing facebook. you said it was free but a billion people, that represents a lot of disposable income.

could you say more about where that is going? >> the primary wave facebook is monetizing is advertising. we want to provide free service. 1 billion people represents a lot of costs to keep everything up and running. advertising is the natural business model for content distribution company. it is the model for every medium. an advertiser can pay to promote wherever it is, whenever the message is they want to sen. the very highest level that facebook can be is a better solution for advertising. it will be easier for the ad to care brought to reach you then medium to do not know who you are. >> they're interesting takes on people -- how people will monetize. we know how to make content people want to share with each

other which would go to lots of people so they started to create the ads for their spread ability. >> i'm curious about the thought process that goes into coming up with the next evolution of facebook. what were the gestations to come up with that is feeding and how many brains -- >> you're right. i think like that. and then you gave birth and no one like the baby. after a while people get used to their kids enjoy in them.

moving on from that process, what goes into making the next evolution? how many brains go into it? and then when you think far advanced, do you take on an outsider's considerations? i am thinking of a generation of kids whose parents think they waste more time on facebook. is there any way of thinking about integrating facebook into educational systems? encouraging kids to facebook in a creative way. making a microcosm, something that may have a more positive predictive outcome from an educational standpoint. >> would love that. the schools are the hard part of their. >> what kind of communication do

you have? where would you go with that? >> we have watched the nascent parked called communities that -- product called communities. it makes sure that only students at that university can use that group. it is a mega group that allows cornell to add the classes and courses. a lot of what was useful finding a class. that was really hard in two dozen 3 to find someone in your anthropology class that lives near you that you could study with and that bit of value multiplied by a billion, it turns out so much of the learning process is people learn less. we do things that are broadly useful like that and can be launched and have a girder of utility, only cornell students can use this and you can create

some groups in cornell for your team and classes or whatever. we will keep looking into doing that. >> the other answer is also that they have an ecosystem of companies that are building on top of facebook and it seems education is one that looks more likely to be felt by an outside company that takes that infrastructure and does something interesting with it. last question in the back. >> with respect to inst agram, how does that compare with the vision that pinterest has for itself? >> we saw instagram as being a compliment for facebook. you could take your front door and put a filter on it and put it in your friend's news feed.

the utility was so tied up in the utility of what facebook was doing with that it was a natural fit. we went to school with those guys and we knew them well, they loved facebook. we liked each other and we have a similar view from what happened and there were growing like crazy. just a remarkably engaging product trade uc their numbers, they're the same. pinterest is used building -- with the tools that facebook offers. you can put this on your time line. if you are hsu collector you can have these grades of shoes you have collected over time. we see them as an awesome partner going into the future. there is going to be a bunch of things like that in the best we can do is provide a world where you get to do exactly what you want and facebook is to the extent to want to share it or spread it to people or collect

it on your time line, you can do that there. >> can you tell us one thing about mark zuckerberg we do not now? we already heard he wears the same clothes every day. dogs playedi's together. we have this q date -- this cute dog named snoop. and a poolie. >> who's dog is the top dog? >> mark is an avid dog owner and dog lover. >> thanks. [applause] [captioning performed by national captioning institute]

[captions copyright national cable satellite corp. 2012] >> more now from the annual conference. how gaming can solve global problems through alternate realities. of i worked with jane for years at the institute for the future and she is a phenomenon. i could not be happier to get a chance to talk with her in front of you and everybody else in webland. talk about how this gaming

notion developed. >> i started working with the institute for the future. it is a nonprofit group in the united states. a lot of what we do is look at the technologies and figure out how they will change how we live in the future. i had done live ph.d. at berkeley looking at gamers and how the games there were playing was changing what it wanted to do in real life. all the communities who would play their games and get all these great skills and look for a juicy problem in the real world that would let them use their skills.

and there were none. what i started to do was look for ways you could create skill. experiences that let people use their skills to solve problems. games are helping scientists have to cure cancer and they're working on climate change, everything you can imagine. >> i do not think people appreciate how the giants this world is. when chris was saying 1 billion photos were applauded every week, that is amazing. tell us about how big this global gaming phenomenon has grown to. >> there are more than 1 billion worldwide his spend an hour a day playing a game on a network device consoles, computer,

mobile home -- mobile phone. >> how many are in this room? >> all those angry birds hours count. >> three. >> this is not the most representative. >> tell us about this world that we are not experienced with? >> we know one in four gamers is 50 or odler. -- older. it is 13 hours a week for boys and eight hours for girls. this has been a big shift over the last decade. we still have a gender divide. now it is 94% of gross are giving regularly, getting the

same proficiency with technology, the same social skills, collaboration skills so it is good news we see gross gaming. >> i can remember 25 years ago that my two boys who are now 30, we needed to get them engaged with games because it was born to be important for their future and bring development. if you sit in class and you're lucky if that teacher calls on you to answer once a day, whereas if you are in -- making a decision once a second, 3600 times an hour. that is what drives neural development in your brain. my guess is that these kids have physically different wired brains than the older of us. >> that is one thing i got into

is a neuroscience of gaming. a couple of interesting points that we know about games from what researchers are putting on at figuring out. gamers spend 80% of the game feeling -- failing. educational research -- the sweet spot for learning difficult material is to be able to fill 50% of the time because it exposes the gaps between what you know and what you do not know. to realize that we have this world of gaming where gamers are allowed to fail and have to fill most of the time does not allow them to progress toward higher levels of proficiency and ability. we also know that the average young person is right to spend 10,000 hours playing these games by 21.

if you look at middle school and high school attendance, that is 10,084 hours in the classroom with perfect attendance. there are spending as much time playing games as they are in the classroom. learning to be a good gamer. >> it is interesting that failing early and often is what you want people to do when your prototyping so those are really great skills. i am sure people are thinking that is a terrible statistic. i'm sure you get this lot. >> i did not come into this thinking i would become an evangelist for gaming. i was interested because i was seeing gamers who were frustrated in their real lives and wanted to figure out how we could make them happier in real life. i did not start out thinking i

would tell parents or educators or doctors, more games. everything we see about games is pretty great within reason. i should start with a public- service announcement. everything i will say is true if you follow a few rules. one is adults have to game less than 30 hours and kids have to game less than 21 hours. looking at huge populations globally, when you cross those numbers, the benefits to do start to go away. you do get real-life consequences. keep it under that. you should be spending 50% of her time playing with people you know in real life. you can get home alone connected to your computer network but most of these benefits require some social interaction with their real community. that said, we know things like who spend 30% -- this

is true of day -- even if they spend their time playing violent games. it is the problem solving and collaboration. even going all the way up to adults. many trials will be trying to validate this showing that on- line games beat pharmaceuticals for treading anxiety and depression. 30 minutes a day boosts positive emotions and stimulates the same reward system that pharmaceuticals are trying to reactivate you couldn't get through gaming. one reason my company is looking at doing clinical trials for depression as well. >> that is amazing. things like world of four craft

cannot talk about the scale of collaboration that occurs. it is unbelievable. >> interesting. you have lined the virtual world, you can collaborate with 100 people at the same time but what is interesting are the global communities. you have millions of people playing and they are using wikis and youtube tutorials. my favorite game is minecraft. if you have kids, they are probably planet. it is a teaching community. is basically as soon as you discover how to do something cool, you make a video and teach others how to do it. it is this peer to peer educational culture that is inspiring all the on-line educational systems. anybody trying to do the kind --

khan academy. >> i always felt that school was so isolating. the idea that you would have a creative act that hundreds would think is cool when you're in eighth grade and what that would do, it is not possible. the virtual world is vastly more capable of than the physical world can be. you cannot find that many people physically where is virtually it is trivial. >> what you mentioned about this idea that you could have creative agency and be validated as a crater is important -- create short now.

all the most popular games have editors that you can make your own game content or the game is about creating. what is needed is that lines up with what we know about what gamers what. there has been industry research looking at gamers, what do you want to feel when you play a game? there are things like excitement and pride but the number one thing that gamers say they enjoy feeling is creative agency. the feeling they can try something and see the impact of it, to take a risk, to be seen as having of the creative power. that is in need that we do not always do a good job of facilitating when we send kids to school or up to work but the ability to create and be seen as having creative power is huge in gaming. >> am sure this sounds kind of abstract to people. one of the things if you have not seen jane's ted talk it is

a masterpiece and you all should look at it. i wanted you to share from that about how personally this has changed your life. >> i had an interesting opportunity to put my theories and research to the test when i was writing my book. i was halfway through it. i hit my head and i got a concussion. i was -- did not heal properly. it turned into post-concussion syndrome. 30 days later i am still totally rewrite or i can't member people's names. my doctor told me that the most important thing was resting the brand, not to do anything that was dripping the symptoms and although i was anxious and depressed, she said you have to try to be happy because the

brain cannot heal in a state of severe anxiety and depression. you need to change the neurochemistry. whatever you can do. you are sick in bed all day and cannot work. be happy. [laughter] i was halfway through this book about the positive emotions that games provoke and how the connected socially. i was at a low point. i was dealing with-- one of thee effects, i am dealing with thoughts of suicide, and it was this thank god moment when i had mental clarity to think, this seems impossible, but if you can make it a game, you can get through this, so just try. they actually put videos up

while i was a brain injured trying to explain the idea i was going to make the game out of this, and if is a hilarious in retrospect. i cannot figure of the right word, and i am not like this at all. you can see me try to design the game in real time, and it makes hardly any sense. the more i put it together, something you can do every day to feel productive, power of spirited games are trying to collect our foxconn -- power ups. games are trying to collect power ups, and you would battle the bad guys. i needed to try to see where it goes and keep battling until and recruiting allies.

to me it was much easier to reach out to friends and family and say i am playing a game to heal my brain. but was better than saying i am really depressed. i know i hit my head and you thought i am better, but i am not. we do not like to feel vulnerable or ask for help, but i use the game to us for help. -- to ask for help. for me it worked on the impression feeling a sense of purpose every day. it took more than a year, but the game stopped the suicidal ideation immediately and really work on anxiety, so i posted about this online, and people started using it for dealing with chronic pain, insomnia,

cancer, everything you can think of, and based on people playing the game, to improve their social relationships, to get a better support, and to improve their own anxiety over a dramatic illness or injury, we thought of making an app. is free. it seems to be most effective around mental health challenges, but it has been quite a journey. that was three r -- three years ago, and we wound up being able to use the theory about games to try to help people with enormous health challenges. >> mental health is a tremendous problem in this country, and i think this feeling of being alone is a big part of it, and the idea that you can get out of your brain and create this

encouragement world, this world you can work in that is separate from the physical world you feel trapped in, i think that is an important step forward, so how have you turned this into a super best lab. >> it is super better. the sequel will be super best. thank you. you talk about getting outside of yourself. this is like a multi player game. you sign up for a challenge, but you invite friends and family, and you can recruit allies, maybe someone who has been there before and what sued mentor you. one thing we found is fascinating we have 125,000 players. we have more than 50% acceptance rate when you invite somebody to

play, which side is very high. you are lucky to get more than 100 people, and these allies spend more time on the game. they do more daily activities just trying to help other people, suggesting a class, giving them positive feedback, and i think what we are discovering is there is a tremendous desire to help others. we are seeing that in the commercial game industry. people see games as competitive, but three of the four gaming hours are spent in cooperative game play. people want to help, so we are seeing that in super better 2. maybe this is a platform that

would actually help the health of anybody volunteering to be an allied because it increases your sense of meaning and purpose in connection. >> we have heard about social entrepreneurship, and this is taking it to the basic human social involvement, namely individuals, that you do not have to solve a big crisis in the rain forest. you can help somebody get through a really difficult time. >> this is the big thing. it is something we have been grappling with. a great opportunity of network culture is to find little things for ordinary people to do, and crowds are saying it is a huge success in some areas, -- crowd sourcing is a huge success in some areas, but it seems to me there is a much bigger opportunity to unleash our

compassion, our humanity, not just improving artificial intelligence, but also what is the smartest thing to help somebody else feel less alone or more optimistic about a challenge? not all people have explored this yet. think about wikipedia. the unit of contribution is one side. what is a unit of contribution to help someone who is having a hard time? we are trying to build back. >> this is like what we said in the 1960's about spreading random acts of kindness. now you can do it now on a large scale. >> it is not going to be random anymore. >> one of the things i think this is going to intersect with is mobile health.

we are going to have a great panel at 1:15 on mobile health, and mark will interview tomorrow. what is happening is all this data as individuals about the state of our body is coming out on the web. you can choose to share it, so it is an enormous amount of data that software can be applied to and in particular, software of games, so there is going to be an intersecting trent to where we get an indication -- trend to where we get an indication for these challenges that will have an impact. >> there are so many great experiments. first, people collect the data, and people are not always

interested in that. there is a great project where they used game mechanics to get people to report air quality data and also uses of inhalers like putting a gps monitor on an inhaler so you can see where people are having asthma attacks, and they use game mechanics to make people more willing to participate. they made it a community, made it fun, so people have to collect the data for this to work but also to make sense of it. a lot of people are interested in game mechanics for behavioral change. once you see the data, what are you going to do about it? we know games are great for giving people concrete questions that can be relevant to your skill level, to your resources available, and i think it will be so much easier instead of

just telling somebody, you have to lose weight. you have to exercise more. we are going to live your phone and see that you have not texted or call any one in 48 hours. we know you need to do that, so we can tell if you have not left your house today and you are depressed. >> this is going to revolutionize our lives as humans. this next big thing we are going to have is a motion tracking. everyone is going around like but there is lawong, the camera looking at your face all day long, and we have a perception lab, and they have shown that just by reading the muscles on the face, you can

tell the mental state, emotional state of the person, even the pain level in kids were you try to make sure you do not over medicate them. they cannot tell you what their pain is, but this thing can. imagine this thing is reading your face all the time. there are digital signal processors in the phone that are powerful enough to be essentially making a diary of your mood and comparing it, so what fraction of the day are you smiling compared to a week, a month? these are incredibly useful indicators to not just mental- health, but so much of that is actually biochemical. serotonin, dopamine levels have a lot to do with whether you are depressed or happy, so this is deep insight into the person.

imagine the more data there is, the more artificial intelligence can do a good job of coming up with a predictor that is useful. >> game designers like me get excited about designing intervention. if you are looking at the screen, one of the metrics we use is a three to one ratio common so some of you -- 321 ratio, so you have to get your positive to negative ratio of 3: 1 in order to achieve a lot of health benefits, social benefits, people like you more and want to help you. if you are alone and not read: 1, you want to actively intervene, and game developers can develop all kinds of interventions. playing angry birds for 30 seconds can help. my favorite is looking at pictures of baby animals.

research came out of japan further validating this. the internet has never been happier. it does have a lasting effect. you can look at a picture of a baby animals for 30 seconds and be more productive because your attention is sharpened, you have a positive the motion of driving your activity. game designers can come up with a million things for you to do once the system recognizes the need that. >> the other thing i found fantastic in your peptalk -- this seems abstract, but the idea that you are linked in your life and the productive quality of those extra years by these kinds of behavior changes and feedback. can you talk a little bit about that?

>> after i went through that experience with a brain injury i was really curious about one thing seemed to help -- what things seem to help like a five minute walk or baby animals, and i started to learn about resilience research. i learned there are four areas of resilience that contribute to high quality of life. it is physically, which means you need to disrupt sedentary lifestyle. i think we need to hack conferences like this, because it is too much sitting. you should never sit more than an hour at a time. i will teach you one d coulter thing that will help us. -- one geek culture things that will help us. one of my favorite terms is italian for pride when you overcome an obstacle.

it is a signature to gamer in motion because you spend 80% of your time failing, and when you win you feel like you've earned it. this is something everyone has the same physical expression. you see it in soccer players after they make a go. what we should do, everybody should think of something hard they have done in their lives. we should do this together because not only will it feel awesome, it will help us live longer. think of something you did, and you feel so inspired you are going to jump out of your chair. what do you want to think about? see you have something? >> i am good. >> ready? one, two, three. to that during every talk. they will think they are getting a standing ovation. they will be very excited.

>> this is serious science, and the ability to make these choices, to get up and move, is not just eating vegetables, which would also be a good idea, but the emotional state, having more positive emotion. positive emotion is chemicals and in your bloodstream, and they have a cascade of other hormonal changes you inducing your body, so this is for real, so the idea you could have this virtual universe available on different platforms but with gaming turned into essentially your personal growth coach and your personal assistant and everyone of us has one that is customized to our lives, our numbers, our needs, and only the

web can do this. only having a planetary computer -- the big things like amazon, google earth, these folks are adding like a million cars a year. -- cores a year. i do not think anyone has any idea how bad this is said it continues to escalate, so the ability to have that power on you, that is a world we have never been in before. >> the key thing about emotional resilience is it does not matter where the emotions come from. i have been doing this work for more than a decade, and one of the most confounding critiques the fields listed in it, i have been struggling is whether it is

legitimate or not. what happens in games is not real, so even if we feel good company and we will leave the game -- it is not a real achievement. it does not really move us forward in our lives, so it does not count, but now we know from research on positive emotions that it does not matter where you get these sources of promotions, so that is why you see all these studies of games and improving longevity, declining demand share, in approving relationships between parents and kids. new -- declining dimensia, improving relationships between parents and kids. they have done studies with kids in hospitals. they can lower their anxiety. you can help posttraumatic stress disorder just by having somebody play a game like temptress-- tetris 24 hours

after an event. there are so many interactions we have i think we can put aside this idea that what happens in the game stays in the game. >> if you think there is reality, it is all in your brain. your visual cortex is working with your auditory cortex to create what you think is reality. there may be one, but what we have in our brains is as virtual as what is on the web. let's open it to questions. we have mike. >> good afternoon. i am ted walter from the san diego zoo, and i have lots of pictures of baby animals, and you can spend 30 seconds or more. we have a live camera on our baby panda, and you can get that through a free app, not that i

want to promote that. it seems like is good for your help. i am most interested in trying to find ways to preserve wildlife. i was really intrigued by the concept. how would somebody like me or my organization go about constructing a game like this to get people involved in a solution so we are not alone in this planet? where would we start? >> i set up as do with some game developers a couple years ago, regional -- set up a zoo with some game developers a couple years ago, so this works that you can do this. there is an organization to curate examples and also help matchmaker between organizations and developers, and within that group as a social network are foundered --

i founded. people think gamers' are playful, and they are not. gamers are so serious and goal oriented and strategic and take it seriously. in many ways it does not feel playful at all, so i refuse to use that word. it is a social network for people to find each other, so that is a good place to start. for anyone thinking, how do i get involved, if you do a web search for games for zoo, climate change --i think we could play a game right now where you could give me five things and there would be a case example for every single.

search for the most random thing, and there should been a case id, and people are very generous in helping out, especially university students. all the time i get organizations to recruit, so there are so many young people interested in games for good. >> i have a development background. i used to be with the world bank. my question is the you think games can be used to help people deal with abstract concepts 7-we find the -- concept? we find there are views that poverty is a state of mind, and when you listen to suzy ormond talk about financial literacy, you see there is an emotional content into financial problems, and the argument is people who are perpetually in financial trouble are having trouble

dealing with emotional relationship with money, so my question to you is you think games can be used to help people deal with that emotional relationship with what is basically an abstract concept? >> yes, there are so many examples where people are looking at games with poverty and games of money. one of my favorite examples was a group out of new york city called the area code. if you are looking at lots of examples of creative solutions to problems, is one to look at. they did a game around money where communities in the south that have high rates of mortgage defaults, and low rates of savings, and they made up a currency called making money -- macon money.

macon, georgia, so they had macon money. ads in dollar bills but all of them have been cut in half. they gave out all this money, but they were all half a dollar bill. the currency could be used in local stores in services like cash, but you had to find the other person with half of your bill, and they created a social gaming environment where you could meet up. if we met in a coffee shop we could use its air, and it created a social layer and y to transformnitie the community and also bring positive of motions, that you have solved this problem and have success, and it is really interesting. basically, my answer is yes.

there are so many crazy things you can thing to do with a game that bring in positive emotions and physical environments around even really abstract questions. >> in the back. >> my question is there a gino type associated with gamers? is there anyone who has found a genetic profile? >> around to different types of games, yes. i thing. i will not pretend to understand exactly what genes are being expressed or how, but at the gender level, we know the boys tend to be more motivated by game environments where mastery

is emphasized, certainly competitive environments, but even competition, whereas girls almost universally are spending time in environments where there is collaboration, exploration, discovery. that is interesting, because we start to do game designs for solving real world problems, and you have to think about how different types of people are drawn to different types of games and motivated differently, motivated through social solutions, and i am sure you could dig deeper and find actual variations in the code. >> we just need to do a matchup between your genetics and gamers. >> i was curious if you have any sponsors on -- thoughts on

google now and is there going to be any changes around that? >> huge. one of the biggest next changes in the nature of the cloud is it is going to become much more intelligent. there was an article that came out yesterday about google using massive amounts of computing but also massive amounts of data to improve neural networks, and they said they are getting a 25% increase in voice recognition accuracy just doing that. this is one of the gift that keeps on giving, because of more computing it takes to support users, the more this capability grows, so i have said for some time, imagine there is a service

that if you're building an app you can tap into that is intelligent, but has predictive capability, and there are all kinds of artificial intelligence methods, or other things that can take a advantage of this, but i think that is going to be like a laser that you build apps on top of the cloud. that is something you need to tap into. it gives a huge amount of things. imagine five years from now. ou howk it will astonish yea intelligence this community becomes. watson was on a small set of computers. it is a lot of data for a human,

but compared to a week, not much data. watson is going through the cloud, and they are putting in all the medical textbooks and things like, so this is one of the biggest trends i see coming in the cloud, for it to become much more intelligent and for you to have -- we use to talk about smart path. -- pets. i am more into virtual pets than literal. you do not have to clean of the litter box, but these things -- there are a lot of robots from japan's that have done this, but i think you are going to have multiple personalities for you ud that become a part of you. we are going to have a split

personality, and it will get stronger and better every day. in the fact. -- back. >> i have two questions. can you recommend a game for those of us over 60 who have never played a game? second, the disconnect between physicality and sedentary nature of games, particularly if you are doing something 20 hours a week? >> i think mine craft is the coolest game to check out right now. you can play it on any computer, so that is an easy place to start, and what is great about it is it is kind of like lagos where you build whatever you want, except imagine evil

monsters to destroy whatever you tried to build. >> like brothers. >> there is all kinds of architecture and design, but you can also wander around and see what other people have built. new appreciate them. it is great, and it is really easy to get into. if you need an edge, go to ruth youtube and search for -- go to youtube and search for mindcraft. there are a lot of tutorials. that is where i would begin. the physical nature is something games are working on. obviously we have these physical games like wii, which does a decent job but probably will not replace physical activity.

what we are hoping is that it serve effectively as a gateway or springboards to physical activity. there is lots of research around self efficacy that happens in gaming, where if you have a successful experience, that it changes your perception or increases your likelihood of doing something physically active in the real world, particularly if you have an avatar in the game that looks , so it amplifies how often you are. stanford has the best research on that, so i think to think of the physical aspect of the game as being a gave way to real activity is important, and a lot of folks in the gaming industry are just reminding gamers' to stand up for the last 10 minutes of any game they are playing, because you can play almost any

game standing of, and it is as important for those of us at a computer for more than 20 hours a week that we should be doing that, too. >> this question is going to become dated, because the virtual world is going to quickly overlay the physical world as we walk around. have any of you had a chance to try these google glasses? and they project the virtual world over the physical world. we will all be wearing them i presume in five years, and at that point, i think the world of gaming in our lives as we walk around and do things will fuse, and you are going to have

been augmented reality that is vastly more informative than physical reality. i am looking at you, and i do not know your names. i do not know what you do, but that is crazy. we have that information on the web, and the information is enough to figure out who you are, and i can get the data and put it over your head. that is the kind of world we are going to be living in in just five years, and we will never go back, so that world is the sort of thing james has been talking about for years, and the ability to have the software and virtual world and physical world come together is going to make us all super heroes. >> if the world is as

interesting, it should ameliorates the couch potato affect a little bit. there are always people who liked to sit around, but if we can get a little bit of physical activity into what we think of as sedentary now, hopefully we will get more people in the real world, where they can keep the game going. >> let's thank jane. [applause] >> former u.s. senator warren rudman died last night at age 82. he was an influential member on a balanced budget and deficit issues. he did not run for reelection in 1992. several years later while speaking about his public service, he said he had no regrets about not seeking another term. >> the question is does my retiring reflect a feeling of

pessimism. not necessarily, but i have served this country and a variety of ways. 4677 years, when i met my deputy. private practice, i ran for the senate. i know 25 years of my life was in public service. although i know i look 45, i am a little bit older. i decided there were some other things i wanted to do. i wanted to write. i wanted to do something as a private citizen. if there had been a two-year commitment, i would have done it. not after another six years, and i have never regretted it, and never looked back. do not misunderstand me. if you read my book, you will

get it. i love my service. it meant a lot to me. it was hard to walk away from. there were other things i wanted to do. the easy thing would have been to run for reelection. >> in a few moments, defense secretary leon panetta at the center for new american security. after that, ben bernanke on the economic outlook and the so- called fiscal cliff. then president obama's campaign manager reviews the election. later a discussion of campaign reform and school choice. >> there are many people who might even take issue with grant saving the union during the civil war. didn't linkedin do that? he did it -- didn't lincoln do that?

he did, but he was not the only person. grant was the general who accepted the surrender of the army of northern virginia under robert e. lee that ended the war, so if anyone who won the war on the battlefield, if you could say any one person did, and of course you cannot, but one of the things we do in history is we generalize, because his three is too complicated to get our heads around if we deal with it in its complexity, so grant save the union during the civil war. i do intend rat saved the country during reconstruction as well. >> hw brands on the life of ulysses grant, part of the four- day holiday weekend starting thursday on c-span 2.

>> defense secretary leon panetta looks at how budget cuts could affect the pentagon. we spoke tuesday evening at the center for new american security about the fiscal cliff and fed priorities. >> thank you for coming. it is an honor to be back and an honor to be introducing my old boss. as you know, secretary of the net debt is one of the most respected and experienced hands in washington. his resume is legendary. chairman of the budget committee back in the day when they actually passed a budget, director of the office of management and budget, and chief of staff to president clinton when the white house, director of the central intelligence

agency, and now secretary of defense, so the question is what in the world are you going to do next. this extraordinary resume does not do justice to the man. leon panetta is a wonderful human being and in some ways a man of contrasts. i am going to give you examples. he is known among his counterparts around the world for his warm italian bear hugs. he is also known for the laser light focus he displayed on hunting down osama bin laden. he often holds meetings in his pentagon office with his dog as he up around his beafeet is pressing a commander on how a war plan is going to advance or how they are going to make more progress.

when traveling, who he is known to hang out in the back of the plan with staff and journalists and waxing eloquent about what it is like growing up as an italian american first generation american on a walnut farm outside monterey. hours earlier he had been to all businesses delivering tough talking points on behalf of the president. he is known for his colorful language when talking and often for getting the press corps hangs on every four-letter word. he is also known for the passion with which he pursues the stewardship of his job, whether it is seeking to end sexual assault in the military or ensuring our officers are

trained to hold the highest standards. he cares deeply and genuinely about men and women in uniform, and their families, their sacrifice, about wounded war years, our veterans. he has an easy laugh, but as he would say, he is serious as shit about protecting the united states of america. he is a true patriot. it is my honor to present ceo who leon panetta. -- to present to you leon panetta. >> thank you for that kind introduction.

i am always reminded of my father, who was an immigrant from italy with my mother, and my earliest recollections were washing in the back of the restaurant. then he bought the firm in carmel valley after the war -- bought a farm in carmel valley after the war. my father would go around -- when the trees got older we would go around and shake the branches, and my brother and i would be collecting walnuts. when i got elected to congress,

my father said, you have been well trained to go to washington, because you have been daunting -- dodging nuts your whole life, and i have been successfully dodging them my whole life. i listen to the positions, and i will tell you a story. when events occurred at the cia last week, my wife immediately gave me a call. [laughter] she said, i hope there is no way the president is going to ask you to take that job again. i said no, he's been there, done that. it is an honor to have the chance to share some thoughts

with you on so many issues we confront at the defense department, and if i might take this opportunity, since we are close to thanksgiving to wish you and your families and have the thanksgiving. -- a happy thanksgiving. michelle is a great friend, and i am sorry to see her leave the department of defense, but having been in those kinds of jobs most of my life, i anderson the reason she felt she really wanted to spend some time -- i understand the reason she felt she really wanted to spend time with her family. i should tell you i continue to feel her positive impact throughout the national security community. it is not only because of her time as secretary of defense is

an important position, but also because she is a co-founder of the center for new american security, and you cannot walk for long as the pentagon and not something to somebody from that organization. i would like to single out somebody else who came from there, miller, whose successor for michelle and in a position of policy undersecretary, and he, too, is somebody i depend upon every day to try to deal with everything from a tremendous number of crises we confront to the long-term strategic challenges we also have to discuss, so i am particularly pleased with his

leadership, which follows in the footsteps of michelle and his acumen and wisdom and all the qualities i appreciate. i spent a lot of time in washington, and you need a lot of people, but it is the people who have a conscience and work hard at their jobs who are the most respected people you can work with. as we enter a second term for president obama, jim and so many other alumni will continue to play a critical role in helping guide the of ministration cost defense and foreign policy. with the election behind us, washington is turning its attention to the unfinished business, particularly the unfinished business of the

current congress, including how to avoid falling off the fiscal cliff, how to prevent it from happening, and the impact not as on the fence of the discretionary budget as well, and for our purposes, hopefully they will also take the time to pass a defense authorization in order to be able to set some important policy guidance we need as we go into this next year. the hope is these issues can be resolved before congress adjourns, and we are all hopeful the leadership will be able to come together to find a way to resolve these issues. these are tough decisions. i know how tough they are, but they can do it.

it will take some risks, but that is part of the game. you have to take risks to do the right thing, and i hope they do that. the worst thing that can happen from my perspective is they just kick the can down their road. all that would wind up doing is continuing to present a shadow as to what ultimately will happen, and that is the last thing i need. the fact is when it comes to national security, which challenges and opportunities we face in the future go beyond the political gridlock of the moment. they are significant as we look to not just today but tomorrow. in many ways i say this to the

troops, to the groups i speak to, but i believe this is an era of historic change. we are at a turning point after 10 years of war. we ended the war in iraq. nieto conducted a successful campaign to bring down gaddafi in libya. we are now embarked in what i think he is a good campaign plan to allow us to draw down in afghanistan, and we have a continuing effort against all kinda -- al qaeda, and as we achieve some of those important goals, the united states is

moving towards the end of the longest sustained armed conflict in the nation's history, and i would also like to take a moment to express my pride in the men and women in uniform who have fought throughout that period, putting their lives on line to protect this country. were it not for their sacrifices, were in not for their willingness to do that, we would not be able to accomplish what we have. thank god they are there. [applause] one thing i found out when i came from the cia to the defense department, i have a lot of

great joy is. i have got great weapons, a great ships, great plains, great technologies, but none of that would be worth anything without the good men and women in uniform that serve this country and did it take their lives to protecting this country. that is the real strength of the united states of america. as we transition into this new era, we will have to look at important priorities that will take on a greater urgency, particularly as we looked at the second term of this administration and look at what are the challenges we are going to be confronting. this is not like the past where we come out of the war and the rest might have diminished --

threats might have diminished. then everyone winds of cutting the defense budget. this is a period where even as we come out of the 10 years of war, we are confronting major issues, major threats in the world. we still are involved in a war on terrorism. we are still at war in afghanistan and as we try to draw down in that war. we are in the process of trying to implement the department's defense strategy at the same time we are trying to meet fiscal responsibilities. we are in a period where the

budget situation in this country, a huge deficit we are facing, the debt confronting this country are limited resources and will continue to limit the resources. i did not believe we worked on budgets and the defense department. i do not believe we have to choose between national security and fiscal security. we are at the pentagon is implementing a strategy that we put together in order to deal with the fiscal challenge we are presented. congress handed us $487 billion to reduce the deficit -- the defense budgets over 10 years. my approach was to say, wait a

minute. we are not just going to cut across the board. we are not just going to hollow out the force as we have done in the past. every time we have come out of the war, whether it was korea, vietnam, the cold war, we cut the budget across the board, and we hollowed out the force. we are not going to repeat that mistake, so for that reason, i said to my service chiefs, chairman of the joint chiefs, we have got to sit down and develop a strategy for the future that will provide the defense force for the 21st century, not just now but in the future, and then we will build our budget around that strategy, so one, we know

we are going to be smaller. that is the reality of having at of these wars, but we have to be agile. we have to be flexible, and we have to be on the cutting edge of technology. we are going to have to have force projection in the areas with the biggest problems in the pacific and the middle east. we have to have a presence elsewhere in the world, and to the credit of our military, to design of presence that will allow us to go into countries to be there to help train, to have a presence to work with those countries to develop their capabilities, and it is something i have discussed going into latin america. it is something i have discussed going into the pacific, the asia-pacific region, and the fact is we are doing that in no way countries

respond -- in a way countries respond. they'd like that we are there helping provide capabilities for their own security. in addition, we have to make sure we are capable of defeating more than one enemy at a time and have the capability to do that. lastly, this cannot just be about cutting. it has got to be about investing, investing in space, investing in unman systems, investing in the kind of mobilize quickly. those are important investments for the future and most importantly, maintaining our defense industrial base in this country so we are not in a position where i am forced to contract out the most important

defense capabilities i need. i cannot do that. i cannot just contract to another country. i have got to have that capability when the united states, so those are elements of the strategy. we built a budget that looked at every area of the defense budget to analyze what do we do with structure, what do we do with procurement? what do we do with regards to compensation? what do we do in trying to develop the kind of efficiencies we need to develop at the defense department? all of that was part of our budget. all of that we presented to congress. we have to continue to work on that. we have the problem of counter proliferation, of dealing with the nuclear threat in north. , dealing with the nuclear threat in iran. those remain unstable and uncertain, regimes we have to

deal with. we are dealing with cyber security, and this is an area that represents the battlefield of the future. we are going to have to be ready to deal with it. we are going to have to be ready to deal with the private sector and other government agencies to make sure we are ready to deal with that. now the challenge of energy security, and that is particularly true for the defense department. the ability of trying to improve our efficiency in moving from one area to another, you have got to be energy of fission, not to mention energy security with regards to larger security issues. we have got to implement this rebalance to the pacific, something i talked about on the trip i just took to the pacific. this is my fourth trip to the